Strategy-based supplier selection

Abstract

The most progressive companies pay close attention to their PSM function and attempt to improve the management of their supply base recognizing its contribution to strategy implementation and to overall corporate performance (Carr et al., 1999a; Kannan et al., 2002; Morash, 2001; Smith-David et al., 1999; Vonderembse et al., 1999). Traditionally, PSM has been treated as a lower level operating function which has little to do with overall corporate strategy development and implementation (Farmer, 1978; Matthews et al., 2000). Much of the available literature on this subject treats PSM strategy and policy from an operational perspective (Narasimhan et al., 1998; Watts et al., 1995). More recent publications began to recognize the importance of PSM and its supply base in formulating and implementing corporate level strategies (Ferguson et al., 1996; Kligge, 1992). One of the key problems in optimally managing the supply base is the development of a framework linking corporate level strategies to PSM strategy and their subsequent elements as described in chapter 2.3.2. This doctoral thesis focuses on the linkage between strategic suppliers’ capabilities and the buying firm’s strategic priorities as well as their influence on the generation of competitive advantages.