Low cost country sourcing and its effects on the total cost of ownership structure for a medical devices manufacturer

Weber, Matthias; Hiete, Michael; Lauer, Lars; Rentz, Otto

doi:10.1016/j.pursup.2009.06.001

Cited by 49 publications

(48 citation statements)

References 42 publications

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“…Besides these most common theories, several authors apply other approaches to explain international sourcing phenomena such as grounded theory, inventory, or social capital theory, fuzzy set theory, or resource dependence theory (e.g. Agndal, 2006;Weber et al, 2010;Carter et al, 2008;Chan et al, 2008;Gelderman & Semeijn, 2006, Manuj & Mentzer, 2008Tsai et al, 2009;Young et al, 2009). We also find an increased usage of "intellectual eclectic" approaches (i.e.…”

Section: Theoretical Foundations In Purchasing and Supply Chain Managmentioning

confidence: 68%

“…While past research has established comprehensive collections of potential drivers, facilitators, and barriers (see the overviews by Nassimbeni (2006) Giannakis et al, 2012); what is more common is a focus on cost effects (e.g. Fredriksson & Jonsson, 2009;Young et al, 2009;Weber et al, 2010), effectiveness (e.g. Hartmann, Bals, & Kaiser, 2008;Trautmann et al, 2009), and profitability (e.g.…”

Section: Research Streams Identified In Past Reviewsmentioning

confidence: 99%

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Determinants of International Purchasing Success: An Analysis of the Status Quo of Research

Tressin

Richter²

2014

MOS

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International purchasing is one of the most important strategic topics for managers, and attracts more and more interest among researchers. The literature review in this article analyzes the status quo of theoretical knowledge and empirical research in international purchasing. We find that, owing to the relatively recent focus on international purchasing as a scientific field, research often still lacks strong theoretical foundations, does not make enough use of advanced empirical methods, and still lacks systematic insights on the intricacies of purchasing success. Building on what progress has been made in past studies, we provide a strategy and structure framework of determinants of international purchasing success that seeks to contribute to clearer theoretical thinking in the discipline and offers a formidable platform for the design of future empirical research.

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Section: Theoretical Foundations In Purchasing and Supply Chain Managmentioning

confidence: 68%

Section: Research Streams Identified In Past Reviewsmentioning

confidence: 99%

Determinants of International Purchasing Success: An Analysis of the Status Quo of Research

Tressin

Richter²

2014

MOS

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“…This enhances the purchasing department's capabilities and therewith leads to higher purchasing and firm performance (e.g. Kusaba, Moser, & Rodrigues, 2011;Weber, Hiete, Lauer, & Rentz, 2010). Involvement is the extent of integration of functional and hierarchical levels (Glock & Hochrein, 2011) in the purchasing process; often the overall size of a purchasing team is referred to as a measure of involvement (Johnston & Bonoma, 1981).…”

Section: The Causal Model and Research Hypothesesmentioning

confidence: 99%

The influence of organizational structure on international purchasing success

Tressin¹,

Richter

Midgley³

2015

Proceedings of the 2nd International Symposium on Partial Least Squares Path Modeling: The Conference for PLS Users

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International purchasing is one of the most important strategic topics for managers and attracts more and more interest among researchers. Yet, research often lacks strong theoretical and systematic insights on the intricacies of purchasing success and does not make enough use of advanced empirical methods. We apply a structural equation modeling technique to better research into the intricacies of higher or lower purchasing performance owing to different organizational design choices. We build our model on the resource-based view and on transaction cost economics and make use of survey data of purchasers engaging in international sourcing activities. We find four important drivers of purchasing performance, namely specialization, configuration, standardization and centralization. The importance of these drivers seems to be contingent on the sourcing environments, namely on the characteristics attributed to high cost and low cost countries.

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“…Platts and Song (2010) research global sourcing decisions in China and its total cost impact, finding that companies lacked a real understanding of the total costs involved in global sourcing decisions; an in-depth case study shows an average price deviation of 50% between the real total cost and the quoted price. In addition, Weber et al (2010) provide a case study involving Siemens Healthcare and discuss the total cost of ownership calculation, which is based on activity costing. Several additional cost factors must be considered in low-cost country sourcing, and management support is necessary due to the additional effort and cost in supplier management.…”

Section: Global Sourcingmentioning

confidence: 99%

“…Nellore et al (2001) argue that even global sourcing cannot be seen as "lean" in terms of production, and Akesson et al (2007) propose not sourcing from Asian countries if the company in question offers no skills or experience. The total cost approach is weak, and companies need to improve in the development of appropriate tools and frameworks (Platts and Song, 2010;Weber et al, 2010;Schiele et al, 2011). Changing environments and risks influence global sourcing operations, especially when it comes to innovation and intellectual property protection (Maltz et al, 2011).…”

Section: Industrymentioning

confidence: 99%

Development of a risk-oriented strategic sourcing (ROSS) framework for the construction and electronics manufacturing industries

Kotula¹,

2014

Supply Management Research

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Strategic sourcing has increased in importance in recent years, and now plays an important role in companies' planning. The current volatility in supply markets means companies face multiple challenges involving lock-in situations, supplier bankruptcies or supply security issues. In addition, their exposure can increase due to natural disasters, as witnessed recently in the form of bird flu, volcanic ash and tsunamis. Therefore, the primary focus of this study is risk management in the context of strategic sourcing.The study presents a literature review on sourcing based on the 15 years from 1998-2012, and considers 131 academic articles. The literature describes strategic sourcing as a strategic, holistic process in managing supplier relationships, with a long-term focus on adding value to the company and realising competitive advantage. Few studies discovered the real risk impact and status of risk management in strategic sourcing, and evaluation across countries and industries was limited, with the construction sector particularly under-researched.This methodology is founded on a qualitative study of twenty cases across Germany and the United Kingdom from the construction sector and electronics manufacturing industries. While considering risk management in the context of strategic sourcing, the thesis takes into account six dimensions that cover trends in strategic sourcing, theoretical and practical sourcing models, risk management, supply and demand management, critical success factors and the strategic supplier evaluation.The study contributes in several ways. First, recent trends are traced and future needs identified across the research dimensions of countries, industries and companies. Second, it evaluates critical success factors in contemporary strategic sourcing. Third, it explores the application of theoretical and practical sourcing models in terms of effectiveness and sustainability. Fourth, based on the case study findings, a risk-oriented strategic sourcing framework and a model for strategic sourcing are developed. These are based on the validation of contemporary requirements and a critical evaluation of the existing situation. It contemplates the empirical findings and leads to a structured process to manage risk in strategic sourcing. The risk-oriented framework considers areas such as trends, corporate and sourcing strategy, critical success factors, strategic supplier selection criteria, risk assessment, reporting, strategy alignment and reporting. The proposed model highlights the essential dimensions in strategic sourcing and guides us to a new definition of strategic sourcing supported by this empirical study.

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Low cost country sourcing and its effects on the total cost of ownership structure for a medical devices manufacturer

Cited by 49 publications

References 42 publications

Determinants of International Purchasing Success: An Analysis of the Status Quo of Research

Determinants of International Purchasing Success: An Analysis of the Status Quo of Research

The influence of organizational structure on international purchasing success

Development of a risk-oriented strategic sourcing (ROSS) framework for the construction and electronics manufacturing industries

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