The “ugly twins”: Failed low-wage-country sourcing projects and their expensive replacements

Sourcing from China: A Literature Review of Motivations, Outcomes, Problems, and Solutions

“…226 -239 © 2017 outsourcing". Overall, it is crucial to bear the total costs in mind (Bygballe et al, 2012;Platts & Song, 2010) and to include costs for failed projects (Horn et al, 2013).…”

“…Companies sourcing from China experience the Chinese suppliers' unwillingness to acknowledge problems, which leads to cultural clashes (Roth et al, 2008;Salmi, 2006). Besides problems in the general communication, different perceptions exist of what good quality is (Fredriksson and Jonsson, 2009;Horn et al, 2013), and product quality in China is lower than in other regions such as Europe (Horn et al, 2013;Schönherr et al, 2008). The risk of obsolescence (Roth et al, 2008) and poor working practices may occur .…”

Tactics at the category level of purchasing and supply management: sourcing levers, contingencies and performance

“…Essig (2011) states that "it makes sense not to talk about 'the' purchasing strategy; instead strategic sourcing decisions […] are always decided specifically for each category and their supply market conditions" (p. 143). In other words, purchasing may develop specific strategies for homogenous supply markets or families of purchased products and services (Cousins et al, 2008b;Karjalainen andSalmi, 2013), called 'categories' (O'Brien, 2012), 'commodity groups' (Schiele, 2007), 'material groups' (Horn et al, 2013), 'product groups' (Luzzini and Ronchi, 2011) and 'product families' (Monczka et al, 2008). These commodity or category groups are defined as "general categories of purchased items, including materials or services of a similar type provided by the same group of suppliers" (Schiele et al, 2011a), which constitute "a single supply market" (Schiele, 2007, p. 279).…”

“…Each sourcing category, e.g., 'metal sheets', 'leather', 'cables' etc., groups similar materials or services purchased from an overlapping group of suppliers (Cousins et al, 2008b;Horn et al, 2013;Monczka et al, 2008). To achieve cost savings, innovation and other performance goals, each sourcing category requires a tailored set of tactics which have been named 'sourcing levers' (Hesping and Schiele, 2015;Horn et al, 2013;Luzzini et al, 2012;Schiele et al, 2011a;Schuh et al, 2011;Schumacher et al, 2008). Tactical sourcing levers have an immediate practical relevance as they directly address actions that decision makers can take to achieve performance targets (CuervoCazurra et al, 2013).…”

“…A sourcing category does likely neither include only one single material or supplier nor the entire expenditures managed by the purchasing function. In most cases, a sourcing category includes multiple parts and multiple suppliers (Horn et al, 2013;Li et al, 2014). In a category management approach, firms use dedicated purchasing agents; so called 'category managers' that responsibly manage most sourcing activities within one sourcing category (Ateş, 2014;Driedonks, 2010;Sundtoft and Sigurbjornsson, 2013).…”