Title: Non-contractible value creation in buyer-supplier networks - a case study

Authors: Arpan Kumar Kar; Ashis Kumar Pani

Addresses: Indian Institute of Management, Rohtak, Pin: 124001, Rohtak, MDU Campus, Haryana, India ' XLRI, Pin: 831001, CH Area (East), Jamshedpur, Jharkhand, India

Abstract: The investigation of buyer supplier networks has been popular in both information systems and supply chain management literature. This study first discusses the background of how and why the buyer-supplier network structure and size changed with increased adoption of information systems in purchasing. Then it focuses on how supplier consolidation can lead to the initiation of vendor value management programs, which presents opportunities for the co-creation of non-contractible value for both the buyer and supplier. The study explores the relevance of the key sources of non-contractible value, i.e., non-contractible quality, supplier technological investments, information exchange, responsiveness, trust, and flexibility; through a case study. While exploring these sources for non-contractible value, the focus has been limited to the context of direct sourcing only. This descriptive study was conducted in one of the largest steel manufacturers, in close liaison with the vendor value management team within the procurement practice of the firm.

Keywords: non-contractible value; value creation; inter-organisational relationships; information systems; supplier value management; vendor value management; buyer-supplier relationships; supply chain management; SCM; steel industry; supplier networks; case study; procurement management.

DOI: 10.1504/IJPM.2014.064615

International Journal of Procurement Management, 2014 Vol.7 No.5, pp.493 - 507

Published online: 10 Sep 2014 *

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