Procurement's role in resolving demand–supply imbalances: an information processing theory perspective

Abstract

PurposeDrawing on information processing theory, the linkage between buffering and bridging and the ability on the part of procurement to resolve demand–supply imbalances is investigated, as well as contexts in which these strategies may be particularly useful or detrimental. Buffering may be achieved through demand change or redundancy, while bridging may be achieved by the means of collaboration or monitoring.Design/methodology/approachThis study employs a hierarchical regression analysis of a survey of 150 Finnish and Swedish procurement and sales and operations planning professionals, each responding from the perspective of their own area of supply responsibility.FindingsBoth the demand change and redundancy varieties of buffering are associated with procurement's ability to resolve demand–supply imbalances without delivery disruptions, but not with cost-efficient resolution. Bridging is associated with the cost-efficient resolution of imbalances: while collaboration offers benefits, monitoring seems to make things worse. Dynamism diminishes, while the co-management of procurement in S&OP improves procurement's ability to resolve demand–supply imbalances. The most potent strategy for tackling problematic contexts appears to be buffering via demand change.Practical implicationsThe results highlight the importance of procurement in the S&OP process and suggest tactical measures that can be taken to resolve and reduce the effects of supply and demand imbalances.Originality/valueThe results contribute to the procurement and S&OP literature by increasing knowledge regarding the role and integration of procurement to the crucial process of balancing demand and supply operations.

Navigating circular economy: Unleashing the potential of political and supply chain analytics skills among top supply chain executives for environmental orientation, regenerative supply chain practices, and supply chain viability

“…The modified Lindell-Whitney approach was applied to minimize the chance of the smallest possible correlation occurring by chance among the variables. The Lindell-Whitney results (mean correlation) between the marker variable and other variables (0.047) were processed to adjust the correlation coefficients and their significance level (Laari et al, 2023;Lindell & Whitney, 2001). After the adjustment, all significant coefficients remained significant, which suggested that CMB was not likely to significantly impact the validity of the statistical results.…”

“…In addition, to examine the extent to which the analysis results might be impacted by reverse causality (Laari et al, 2023), the data were tested using a regression analysis. This analysis checked whether SCV affects buffering by top SC EPS, top SC ESS, FEO, or RSC practices.…”

“…The results revealed a lack of any significant association with other variables. We further checked the potential endogeneity of the independent variables in the proposed theoretical model using a Durbin-Wu-Hausman test (Laari et al, 2023). Here, we took the age group of the respondent as an instrumental variable.…”

Bridging versus buffering: how IT capabilities and dependence advantage shape responses to supply chain disruptions?

“…RDT characterizes a firm as an open system to obtain essential resources from outward and inward approaches (Pfeffer and Salancik, 1978). Bridging and buffering responses from RDT provides a rich predictive framework to explain how firms can deal with environmental uncertainty to minimize or overcome resource dependencies and improve their organizational autonomy (Kalaitzi et al, 2019;Laari et al, 2023). According to RDT, IT capabilities should be aligned with response strategies, which means that outward bridging and inward buffering may require support from corresponding structural IT capabilities (Kalaitzi et al, 2018).…”

“…Bridging and buffering responses from RDT provides a rich predictive framework to explain how firms can deal with environmental uncertainty to minimize or overcome resource dependencies and improve their organizational autonomy (Kalaitzi et al. , 2019; Laari et al. , 2023).…”