Title

The Sourcing Hub and Upstream Supplier Networks

Publication Type

Journal Article

Publication Date

3-2014

Abstract

In this paper, we explore how firms can better manage their sourcing by developing relationships not only with their suppliers but also with their suppliers' suppliers. We detail an empirical case study explaining how the firm developed relationships with its suppliers and raw material suppliers via a collaborative center, the sourcing hub. We then analytically model the scenarios encountered in our empirical work and examine two facets of upstream sourcing under uncertain demand scenarios: (a) firms can supply raw material directly to their suppliers, and this may be beneficial for the firm and its suppliers; and (b) firms can bring their suppliers together at the sourcing hub, and the resulting cooperation between suppliers is beneficial for the suppliers and the raw material suppliers. Overall, our work explores the market and economic conditions under which active management of upstream sourcing can add value to supply chains.

Keywords

sourcing hub, raw material sourcing, supplier network

Discipline

Operations and Supply Chain Management

Research Areas

Operations Management

Publication

Manufacturing and Service Operations Management

Volume

16

Issue

2

First Page

238

Last Page

250

ISSN

1523-4614

Identifier

10.1287/msom.2013.0461

Publisher

INFORMS

Additional URL

http://dx.doi.org/10.1287/msom.2013.0461