Sourcing Indirect Spend: A Survey of Current Internal and External Strategies for Non‐Revenue‐Generating Goods and Services

Cox, Andrew; Chicksand, Daniel; Ireland, Paul; Davies, Tony

doi:10.1111/j.1055-6001.2005.04102004.x

Cited by 49 publications

(87 citation statements)

References 14 publications

(12 reference statements)

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“…Because the intermediary is often paid on a transaction basis, particularly in TPA and PPO models, motivations to reduce service intensity must be built into the agreements and some form of general clause contracting is needed (Cox, Chicksand, Ireland, & Davies, 2005) to enforce those agreements adding to the complexity of the relationship. The effectiveness of the outsourcing strategies as a mechanism to control health care inflation does not appear to have significance.…”

Section: )mentioning

confidence: 99%

Promise and problems with supply chain management approaches to health care purchasing

Ford

Scanlon

2007

Health Care Management Review

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Abstract:Background: Double-digit health care inflation, coupled with widespread reports of poor care quality and deadly medical errors, has caused private sector employers to reevaluate their health benefits purchasing strategies, with a focus on supply chain management approaches. In other industries, this strategy has proven to be an effective method for simultaneously reducing costs and increasing quality. Purpose: This article describes four current applications of supply chain management network methodologies to health care systems and identifies potential ways to improve purchasers' return on investment. In particular, information exchanges, purchase decision, and payment agreement components of integrated supply chains are described. Approach: First, visual depictions of the health care supply chain are developed from a purchaser's perspective. Next, five nationwide programs designed to realign incentives and rewards across the health care supply chain are described. Findings: Although several nationwide efforts are gaining traction in the marketplace, at this time, no cost reduction and quality improvement program initiative appears to systematically align the entire health care supply chain from providers to purchasers, raising doubt about the ability of supply chain management network techniques to significantly impact the health care marketplace in the short run. Practice Implications: Current individual efforts to coordinate the health care supply chain do not act on all of the actors necessary to improve outcomes, promote safety, and control costs. Nevertheless, there are indications that several of the individual efforts are coming together. If national efforts touching on all critical elements can coordinate with purchasers, then the health care supply chain's performance may improve significantly.

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Section: )mentioning

confidence: 99%

Promise and problems with supply chain management approaches to health care purchasing

Ford

Scanlon

2007

Health Care Management Review

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“…Cox et al (2005) provide evidence that the sourcing function does not control the whole spending of a company and lacks internal buy-in. This interesting finding is based on a holistic quantitative survey, which does not allow the interviewee to comment on certain questions.…”

Section: Products and Service Sourcingmentioning

confidence: 99%

“…This leads to additional optimisation potential for sourcing managers. Cox et al (2005) analyse sourcing strategies in indirect procurement among 124 organisations through semi-structured interviews. Although companies see a need to manage indirect spending, appropriate management is not established and this spending lacks internal customer buy-in, has a high degree of maverick buying and is extremely fragmented.…”

Section: Products and Service Sourcingmentioning

confidence: 99%

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Development of a risk-oriented strategic sourcing (ROSS) framework for the construction and electronics manufacturing industries

Kotula¹,

2014

Supply Management Research

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Strategic sourcing has increased in importance in recent years, and now plays an important role in companies' planning. The current volatility in supply markets means companies face multiple challenges involving lock-in situations, supplier bankruptcies or supply security issues. In addition, their exposure can increase due to natural disasters, as witnessed recently in the form of bird flu, volcanic ash and tsunamis. Therefore, the primary focus of this study is risk management in the context of strategic sourcing.The study presents a literature review on sourcing based on the 15 years from 1998-2012, and considers 131 academic articles. The literature describes strategic sourcing as a strategic, holistic process in managing supplier relationships, with a long-term focus on adding value to the company and realising competitive advantage. Few studies discovered the real risk impact and status of risk management in strategic sourcing, and evaluation across countries and industries was limited, with the construction sector particularly under-researched.This methodology is founded on a qualitative study of twenty cases across Germany and the United Kingdom from the construction sector and electronics manufacturing industries. While considering risk management in the context of strategic sourcing, the thesis takes into account six dimensions that cover trends in strategic sourcing, theoretical and practical sourcing models, risk management, supply and demand management, critical success factors and the strategic supplier evaluation.The study contributes in several ways. First, recent trends are traced and future needs identified across the research dimensions of countries, industries and companies. Second, it evaluates critical success factors in contemporary strategic sourcing. Third, it explores the application of theoretical and practical sourcing models in terms of effectiveness and sustainability. Fourth, based on the case study findings, a risk-oriented strategic sourcing framework and a model for strategic sourcing are developed. These are based on the validation of contemporary requirements and a critical evaluation of the existing situation. It contemplates the empirical findings and leads to a structured process to manage risk in strategic sourcing. The risk-oriented framework considers areas such as trends, corporate and sourcing strategy, critical success factors, strategic supplier selection criteria, risk assessment, reporting, strategy alignment and reporting. The proposed model highlights the essential dimensions in strategic sourcing and guides us to a new definition of strategic sourcing supported by this empirical study.

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“…However, the analyses focused on direct purchases only. Indirect purchases have been excluded as the focal firm follows distinct purchasing policies for indirect purchases that might have biased the choice of sourcing levers (Cox et al, 2005;Karjalainen and Salmi, 2013).…”

Section: Data Collection: a Survey Of 107 Sourcing Projectsmentioning

confidence: 99%

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

Hesping¹

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Sourcing Indirect Spend: A Survey of Current Internal and External Strategies for Non‐Revenue‐Generating Goods and Services

Cited by 49 publications

References 14 publications

Promise and problems with supply chain management approaches to health care purchasing

Promise and problems with supply chain management approaches to health care purchasing

Development of a risk-oriented strategic sourcing (ROSS) framework for the construction and electronics manufacturing industries

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

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