Multi-step process for selecting strategic sourcing options when designing supply chains

Abstract

Purpose: This paper, dedicated to the selection of strategic sourcing options as a part of the supply chain design, aims to provide supply chain designers with guidelines for selecting the best strategic sourcing option for each item (i.e., products, modules, parts and services). Design/methodology/approach: The study is based on a literature review of the sourcing options, buyer-supplier relationships, factors and criteria for selecting a sourcing strategy and the authors’ personal experience in this field. Findings: We propose a multi-step process by considering the three dimensions of the strategic sourcing options (i.e., who and how many will make the item; in cases of outsourcing, the kind of relationship between buyer and supplier(s); and where the item is to be made) along with the characteristics of the context, demand and product, and the relevant criteria to evaluate them. Originality/value: The main contributions are: The consideration of three dimensions to characterise the strategic sourcing options; a review of the factors and criteria relevant to decision-making in this respect for each item (i.e., products, modules, parts and services); and the guidelines provided for each step of the process.