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.
sourcing hub, raw material sourcing, supplier network
Operations and Supply Chain Management
Manufacturing and Service Operations Management
AGRAWAL, Anupam; VAN WASSENHOVE, Luk N.; and DE MEYER, Arnoud.
The Sourcing Hub and Upstream Supplier Networks. (2014). Manufacturing and Service Operations Management. 16, (2), 238-250. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/4119
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