Vol. 44, No. 2
Outsourcing: Transaction Cost Economics and Supply Chain Management (invited paper)
This article examines outsourcing from the transaction cost economics (TCE) perspective. The transaction is made the basic unit of analysis and the procurement decision, as between make and buy, is made (principally) with reference to a transaction cost economizing purpose. As sketched herein, the ease of contracting varies with the attributes of the transaction, with special emphasis on whether preserving continuity between a particular buyer-seller pair is the source of added value. The basic regularity is this: as bilateral dependency builds up, the efficient governance of contractual relations progressively moves from simple market exchange to hybrid contracting (with credibility supports) to hierarchy. This last corresponds to the "make" decision, which, as viewed from the TCE perspective, is viewed as the organization form of last resort. The article successively describes the lens of contract approach to economic organization, the operationalization of TCE, different styles of outsourcing, qualifications to the foregoing and the main lessons of TCE for the supply chain literature.
Oliver E. Williamson, Ph.D., is Professor of the Graduate School at the University of California-Berkeley, Berkeley, California.
Developing Purchasing's Foundation (invited paper)
This is the first of a two-part paper, which reviews the evolution of the supply management function from the 18th century to 1940. A second paper will examine the continued evolution of supply management from 1940 until the present. The 1830-1940 period in North America was one of tremendous development for purchasing. It started with occasional reference in management texts and, particularly after 1900, saw the evolution of a host of ideas representing the foundation of today's perspective on supply management. At no time did purchasing practitioners and academics see the function as a narrow buying activity. Clearly, our predecessors were well aware of the benefits of integration and would have been comfortable with today's supply chain management precepts. They also recognized value, cost and price analysis, value analysis, purchasing research, talent management, outsourcing the supply function, supplier relationships, strategy and the need for performance measurement. They strived to contribute effectively to organizational goals and strategies, well aware of the potential impact of their actions on organizational success. An understanding of supply's evolution may not only assist today's supply management practitioners and academics in placing current practices and theories in context but also in charting our future.
Michiel R. Leenders, D.B.A., holds the Leenders Purchasing Management Association of Canada Chair and Professor Emeritus/Director of the Ivey Purchasing Managers' Index at the Richard Ivey School of Business, University of Western Ontario in London, Ontario (Canada)
Harold E. Fearon, Ph.D., is the Institute for Supply Management™ Professor Emeritus at Arizona State University, Tempe, Arizona and Founding Editor Emeritus of the Journal of Supply Chain Management.
Buyer-Supplier Relationships: Derived Value Over Two Decades
This paper reviews studies of buyer-supplier relationships published in four prominent U.S.-based academic journals between 1986 and 2005. Our review revealed that the focus of academic researchers on types of value being extracted from buyer-supplier relationships changed between 1986 and 2005, as did their interest in the buyer mechanisms implemented to create value in these relationships. Although emphasis has changed over time, we found that scholars have primarily investigated four types of value derived from buyer-supplier relationships: operational performance improvements, integration based improvements, supplier capability-based improvements and financial performance outcomes. The review also noted that researchers considered more buyer-supplier mutual efforts since 1996 than the earlier decade, but the number of studies investigating buyer practices has declined as a percentage of total publications. We conclude with a discussion of the review's implications for future research and practice.
Regis Terpend, Ph.D., is Assistant Professor of Supply Chain Management at Boise State University, Boise, Idaho,
Beverly B. Tyler, Ph.D., is Associate Professor of Strategic Management at North Carolina State University, Raleigh, North Carolina,
Daniel R. Krause, Ph.D., is Professor of Operations and Supply Management at Queen's University Belfast, Belfast (Northern Ireland)
Robert B. Handfield, Ph.D., is Bank of America University Distinguished University Professor of Supply Chain Management at North Carolina State University, Raleigh, North Carolina.
Special Topic Forum on the Gap Between Research and Practice in Supply Chain Management
The essays that make up the Special Topic Forum include:
- Rather Than Searching for The Silver Bullet, Use Rubber Bullets: A View on the Research-Practice Gap (invited comment)
Gregory G. Dess, Ph.D., the Andrew R. Cecil Endowed Chair in Management at the University of Texas, Dallas, Texas
Livia Markoczy, Ph.D., Associate Professor of Management at the University of Texas, Dallas
- Having it All: Rigor Versus Relevance in Supply Chain Management Research (invited comment)
Barbara B. Flynn, D.B.A., the Richard M. and Myra Buskirk Professor of Manufacturing Management in the Kelley School of Business at Indiana University, Indianapolis, Indiana
- Engaging Corporate Partners to Bridge the Theory-Practice Gap (invited comment)
Michael D. Hutt, Ph.D., the Ford Motor Company Distinguished Professor of Marketing at Arizona State University, Tempe, Arizona
- Rigor Versus Relevance: Why Would We Choose Only One? (invited comment)
John T. Mentzer, Ph.D., the Bruce Excellence Chair of Business at the University of Tennessee, Knoxville, Tennessee
- Knowledge Production and Knowledge Transfer: Closing the Research-Practice Gap
Craig R. Carter, Ph.D., is Professor of Supply Chain Management at the University of Nevada, Reno, Nevada. He also is Co-Editor-in-Chief of the Journal of Supply Chain Management.
Edited by Craig R. Carter, University of Nevada-Reno