Contracting in Services Outsourcing Triads: An Optimization Perspective
Cosponsored by ASU’s Center for Services Leadership
Investigators: Mei Li, John Fowler, and Thomas Y. Choi
A service outsourcing triad is composed of three nodes – the service buyer node, the service supplier node and buyer’s end customer node and three links: the buyer-supplier link, the buyer-end customer ink, and the supplier-end customer link. Research shows that omission or mismanagement of any link can lead to deadly consequences for a service buyer firm such as cost overrun, customer defects and even expensive lawsuits. However, little is known about the interdependences among the three links. This research sets out to explore these interdependences and make recommendations on the most efficient contractual terms to manage the service outsourcing triad and maximize the buyer firm’s outsourcing objectives.
Assessing a Supplier’s Innovation Performance
Investigators: Tingting Yan, Kevin Dooley, and Thomas Y. Choi
As a buyer, how do you know which suppliers are likely to provide innovation value to you? The goal of this project is to create a survey tool and key performance indicators that buyers can use to assess a supplier’s innovation potential. Innovation potential will be assessed based on a supplier’s historical performance and their capacity to innovate. We will use literature review and CAPS Research member interviews to identify the most common innovation indicators currently used by industry and academic researchers. Once a draft set of indicators is selected, the project will engage CAPS Research members in two rounds of review and revision, ensuring that the tool developed is practical and has broad stakeholder support.
Supply Management Costing Strategies — Establishing and Achieving Cost Savings Targets
Investigators: Lisa Ellram, Wendy Tate, and Thomas Y. Choi
CAPS research is sponsoring a study to develop an understanding of how companies establish goals for costs savings or reduction in purchasing, and what approaches are the more successful. In the last five years, we have seen the emergence of business analytics and more data availability. Companies may be taking advantage of this changing landscape and are developing new approaches to setting cost saving targets, for both materials (i.e. raw materials, parts, modules, etc.) and services (i.e. backroom, maintenance, legal, etc.). We are investigating the cutting-edge approaches to setting and achieving cost saving goals and targets in multiple categories. We will also offer an assessment of the relative effectiveness of different strategies.
Managing Entrepreneurial Suppliers
Investigators: Stephan M. Wagner, Stefan Kurpjuweit, and Thomas Y. Choi
Buying firms traditionally work with established firms that are characterized as ones with stable financial conditions, well-recognized certifications, and track records of high performance. Conversely, entrepreneurial (start-up or new venture) firms can be flexible, dynamic, and innovative, are seen as incubators for product and market innovation, making them also attractive suppliers. This study focuses on how established firms can identify, leverage, and integrate the capabilities of innovative entrepreneurial suppliers. The goal of this case study-based research is to articulate how best these entrepreneurial suppliers should be managed.
Emerging Procurement Technology Landscape: Data Analytics and Cognitive Analytics
Investigators: Robert B. Handfield, Thomas Y. Choi, and Jaikishen Venkitaraman
As volume of data emerging from the “internet of things” expands, there is a growing opportunity to mine this data. Procurement is entering into a new world fueled and powered by analytics, including the areas of big data, cognitive computing, , real-time information, artificial intelligence, and predictive analytics. With many emerging sources of data and platforms under development, chief procurement officers are often overwhelmed by the number of new applications and are unsure as to how to formulate a technology strategy that will enable the right outcomes and marry them to their business strategy.
This research seeks to explore the different sources of data in the emerging procurement technology landscape, and develop a taxonomy of analytic and cognitive technologies that can be mapped to specific procurement strategic objectives. The report will offer a forecast of the projected technology roadmap of analytic and cognitive approaches relative to the likelihood of adoption in the procurement community, with a set of recommendations for executives to consider in plotting their approach to technology investments.
Supply Base Cyber Security: Understanding Threats and Corresponding Security Practices
Investigators: Mohan Gopalakrishnan, Victor Benjamin, and Gail-Joon Ahn
Cyber security has become one of the most critical issues threatening business and industry. In particular, supply bases are increasingly vulnerable to cyber-based threats due to growing reliance of Internet-enabled systems and technology. However, little is known about what areas of supply base are most vulnerable, which cyber-based threats present the biggest challenges, and what proactive measures can be taken to mitigate risk. This study examines the critical issue of supply base cyber security by gathering information from leading buying companies across a number of industries. Information gathering includes interviews, documents, and observations concerning security and their current security practices and mitigation strategies. Several research questions guide our investigations, including:
- To what capacity is security currently considered when making supply base decisions? Does a firm’s industry affect perspectives on supply base security?
- What types of cyber-based threats are there? Could they be detected and prevented ahead of time?
- What threats cannot be stopped, but risks may be mitigated through recovery management plans? How can such plans be implemented?
- Can a set of best practices be developed for both generalized and industry-specific contexts?
Understanding these issues can help CPOs make more informed decisions regarding supply base security while fulfilling business needs. This proposal intends to focus on this issue.
The Role of Supply Management in Mergers and Acquisitions: Separation and Integration
Investigators: Kevin Linderman and David Wohler
Firms increasingly engage in mergers and acquisitions (M&A’s) to improve performance and enhance competitiveness. However, M&A’s often end in failure or don’t deliver the intended benefits. In these situations, firms may have made a poor decision to undertake the M&A in the first place or failed to manage the post integration process that involves both separation and integration of various functions. Successful M&A’s require understanding the firms’ supply chains. This research investigates when to include supply chain in making an M&A decision, what supply chain activities they should separate and integrate, and how they should separate and integrate them. We propose to investigate these issues and how these decisions may vary in different situations across different industries. We will identify best practices and propose a framework for how to engage the supply chain in an M&A.
Currency and Procurement
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