Managing raw material in supply chains

Anupam Agrawal

Research output: Contribution to journalArticlepeer-review

Abstract

In this paper, we explore how firms can manage their raw material sourcing better by developing appropriate sourcing relationships with their raw material suppliers. We detail three empirical case studies of firms explaining their different raw material sourcing strategies: (a) firms can adopt a hands-off approach to raw material management, (b) firms can supply raw material directly to their suppliers, and this may be beneficial for some agents in the supply chain, and (c) firms can bring their component suppliers together, and the resulting cooperation between suppliers can be beneficial for supply chain. We then analytically model the three raw material scenarios encountered in our empirical work, examine the resulting profits along the supply chain, and extend the results to a competitive buyer scenario. Overall, our results show that active management of raw material sourcing can add value to supply chains.

Original languageEnglish (US)
Pages (from-to)685-698
Number of pages14
JournalEuropean Journal of Operational Research
Volume239
Issue number3
DOIs
StatePublished - Dec 16 2014

Keywords

  • Raw material
  • Sourcing
  • Supply chains

ASJC Scopus subject areas

  • Computer Science(all)
  • Modeling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

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