Capability-actor-resource-service : a conceptual modelling approach for value-driven strategic sourcing

This PhD research addresses a problem within strategic sourcing, which is a critical area of strategic management that is centered on decision-making related to procurement. Strategic sourcing is related to two disciplines: (i) procurement and supply management and (ii) strategic management. Sourcing is the strategic part of procurement that refers to tasks like determining cost saving and value-driven opportunities, choosing the most appropriate go-to market strategies, and selecting and evaluating suppliers for building long-term and short-term contractual relationships. Many companies face challenges in obtaining the benefits associated with effective strategic sourcing. Although the concept of strategic sourcing is fairly well recognized, managers are still challenged by many barriers to its implementation. The main problem is the lack of practical instruments (i.e., tools and techniques) to implement the value-driven management approach to strategic sourcing, while at the same time preparing companies for fact-based decision-making by delivering data management and data analytics capabilities. This is the problem which is addressed with this PhD research. To address this problem, the research goal has been defined as “develop a modeling approach that enables companies 1) to drive fact-based decision-making with respect to procurement data management and procurement analytics”; and 2) to implement strategic sourcing toward achieving value-driven targets”. We apply conceptual modeling as our main solution approach to achieve the above research goal. We define three major areas where conceptual modeling can contribute to strategic sourcing decision-making: conceptualization, design and computer support. The proposed conceptual modeling approach is characterized by four different perspectives: (i) a way of thinking (i.e., a conceptual foundation), (ii) a way of modeling (i.e., a modeling language and method to use it), (iii) a way of working (i.e., a model-based analysis approach), and (iv) a way of supporting (i.e., a computer-aided design tool). The scope of PhD research is limited to the first three perspectives, while for the fourth perspective a solution architecture will be proposed as part of future research. This PhD dissertation is a paper-based dissertation consisting of six chapters. Three chapters (chapter 3, 4, 5) of this dissertation have been submitted to international peer-reviewed journals (chapter 4 is published and chapters 3 and 5 are accepted) and one chapter (chapter 2) has been published in the post-conference proceedings of an international workshop

CAPABILITY SOURCING: A SERVICE- DOMINANT LOGIC VIEW

Sourcing is evolving into a strategic process for organizing and fine-tuning the firm’s value chain. Companies need to strategic sourcing in order to survive within the industry, particularly hospitals which are facing rapidly competition to provide high quality services in healthcare. Healthcare organizations need to leverage the right capabilities from the right source, and the right shore, at the right cost to improve their competitive position. Capability sourcing is an organizing process to execute strategic sourcing and improve the firm’s competitive position through gaining access to best-in-class capabilities across the value chain to ensure long-term competitive advantage. The main problem is a lack of technique to explore sourcing alternatives (insourcing, co-sourcing and outsourcing) and choose the right sourcing model. Our research solution is applying conceptual modeling as a technique to create schematic descriptions of alternative solutions based on organization’s capabilities to facilitate strategic sourcing decision making. The fundamental requirement of capability sourcing conceptual modelling is a language as a carrier for modeling intermediate artifacts of sourcing alternatives. Our position is introducing service-dominant logic conceptualisation as a well-defined language for capability sourcing conceptual modeling

Value-driven strategic sourcing based on service-dominant logic

Currently, procurement is approached as a tactical process focused on spend management. The aim of this process is the identification of cost savings. A new paradigm of procurement is emerging that recognizes procurement as a value creation practice. This paradigm, referred to as value-driven strategic sourcing, lacks instruments for implementation. This paper presents a new conceptual modeling approach for exploring and evaluating sourcing alternatives that is based on a systemic view of value cocreation. Our approach, called CARS (which stands for capability, actor, resource, and service), is the result of a design science research project. This paper presents the underlying conceptualization of CARS, which was constructed through a mapping between service ecosystem concepts grounded in service-dominant logic and the viable system approach and strategic sourcing concepts derived from the resource-based view theory of competitive advantage, the dynamic capability theory, and the relational view theory of cooperation and competition. Apart from presenting the theoretical foundation of CARS, we also demonstrate by means of a case study of sustainable procurement in a global materials technology company how a model-based approach based on CARS helps in implementing value-driven strategic sourcing. The case study provides a proof of concept of the potential utility of our approach as it addresses specific problems with the company's current procurement practices

Understanding the Effects of Technology Advancement (Internet of Things) on Value Co-creation and Firm Performance

Value co-creation is a study on consumer-firm interactions, where consumers can be actively involved with firms in designing, developing, marketing, distributing, and (or) selling of products to personalize their service experiences. In contrast, value co-destruction exists due to imbalance involvement between consumers and firm in co-creating of value as a result of misuse of resources. Previous studies have shown value co-creation will increase firm performance, whereas value co-destruction will reduce the performance. In the meantime, a recent technological advancement with the introduction of IoT has started to influence the process of value co-creation, co-destruction, and firm performance. This paper is discussing on the concept of IoT that can positively increase value co-creation, and reduce the negative effect of value co-destruction on firm performance, explained from the RBV perspective and S-D logic

Supply Chain-Driven Innovation: The Influence of Supply Chain Resource Orchestration on Organizational Performance

As continuous innovation became a strategic necessity in many markets, organizations are increasingly adding external resources to complement their in-house R&D activities. However, little is known about the concrete practices of employing and integrating those external resources. Hence, this research introduces a new conceptual framework of supply chain resource orchestration (SCRO) on the basis of a systematic literature review and a theory elaboration of resource management theories. Qualitative interviews with supply chain managers in a multi-case study are enriching and substantiating the SCRO conceptualization. Finally, a crosssectional survey (n= 247) is applied to empirically validate the new framework. The positive effects of SCRO on innovation and financial performance are confirmed. As a theoretical contribution, this research bridges supply chain and innovation management literature streams to enhance the understanding of essential resource management practices, their performance consequences, and implications of organizational culture on such relationships. This research extends the domain of resource orchestration theory to supply chain phenomena and the open innovation context. Directions for future research are proposed along with several theoretical and managerial implications

Value Co-Creation through Transparent Buyer-Supplier Relationships: A Case Study in the Supply Network of Industrial Machinery Manufacturer

This research aims to find the appropriate level of transparency in different buyer-supplier relationships in order to enhance value co-creation in the supply network. The previous literature demonstrates that transparency brings many benefits but also causes risks. Therefore, transparency needs to be balanced in different buyer-supplier relationships. This research was an embedded single case study containing three supplier groups within the supply network. The primary and qualitative research data related to the antecedents for transparency and the effects of transparency on value co-creation was collected from 14 in-depth semi-structured interviews. This data was analyzed by a causal map analysis. The secondary research data had been collected from the web-based structured questionnaires from the customer and its 24 suppliers. This data was analyzed by a descriptive statistics in order to describe the current level of transparency in the supply network. The research results indicated that the level of transparency in the supply network varied based on the type of the relationship where the more collaborative relationships had the higher level of transparency and the more powerful actor seemed to force the other to share information. Furthermore, transparency was believed to require trust but also the arranged methods and IT-systems for information sharing which need allocated resources and causes costs. The results also indicated that transparency had many value-creating effects related to capabilities, integration, operational performance and financial outcomes but it also had some value-destroying effects. Lastly, a framework was created in order to determine the development suggestions for the appropriate level of transparency in different buyer-supplier relationships in the supply network so that more value can be created and shared between the actors. The framework is applicable at least with the similar supply networks which provide low volume manufactured products with many different and variable items.fi=Opinnäytetyö kokotekstinä PDF-muodossa.|en=Thesis fulltext in PDF format.|sv=Lärdomsprov tillgängligt som fulltext i PDF-format