Strategic supply management principles theories and practice 1st cousins

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‘Cousins et al. have drawn from their extensive experience in industry, and crafted a book that
provides deep contextual insights into why supply chains are the foundation for competitive
strategy, the dynamics that drive economic change, and most importantly, the importance of
relationships as the glue that keeps supply chains functioning properly. Executives and
students will benefit from the frameworks, examples, and discussions in this book, which
should be on everyone who has an interest in global competitiveness’ bookshelves.’
Rob Handfield, Bank of America University Distinguished Professor of Supply Chain Management,
North Carolina State University

Development of supply chain strategies has become a major growth industry in its own right; most
organisations now see managing their supply chain as a key strategic issue. The main tenet of this
book is that supply needs to be thought about as a dynamic strategic process, and not as a
bureaucratic business function.
Strategic Supply Management: principles, theories and practice traces the development of purchasing
and supply management from its origins as a tactical commercial function into a key strategic
business process. Integrating conceptual models, including the strategic supply wheel, with a host of
practical examples, the authors illuminate the philosophy, concepts and techniques of supply
management. They also contrast the traditional, conventional concepts of purchasing and supply
management with new ideas, radical concepts, and examples of interesting practice.

For a website to accompany this book visit www.pearsoned.co.uk/cousinslamming

Professor Paul Cousins The , Manchester Business School

Professor Richard Lamming School of Management, University of Southampton
Dr Benn Lawson School of Management and Economics, Queen’s University Belfast
Dr Brian Squire The , Manchester Business School
Cover image adapted with permission from Elsevier

an imprint of

www.pearson-books.com

STRATEGIC SUPPLY
MANAGEMENT
P R I N C I P L E S , T H E O R I E S A N D P R ACT I C E

PAUL COUSINS•RICHARD LAMMING
BENN LAWSON•BRIAN SQUIRE

Designed to provide a comprehensive course structure for teaching and studying this
wide-ranging and constantly developing topic, this book guides the reader through the subject
with clarity and logic. Whether used as a course textbook or a source of reference, students and
practitioners will find the authors' comprehensive overviews of the topics indispensable.

STRATEGIC SUPPLY MANAGEMENT

P R I N C I P L E S , T H E O R I E S A N D P R ACT I C E

P R I N C I P L E S , T H E O R I E S A N D P R ACT I C E

STRATEGIC SUPPLY
MANAGEMENT

PA U L C O U S I N S • R I C H A R D L A M M I N G
BENN LAWSON•BRIAN SQUIRE


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Strategic Supply Management
‘Cousins et al. have drawn from their extensive experience in industry, and crafted
a book that provides deep contextual insights into why supply chains are the foundation for competitive strategy, the dynamics that drive economic change, and most
importantly, the importance of relationships as the glue that keeps supply chains
functioning properly. Executives and students will benefit from the frameworks,
examples, and discussions in this book, which should be on the bookshelves of
everyone who has an interest in global competitiveness.’
Rob Handfield
Bank of America University Distinguished Professor of Supply Chain Management
North Carolina State University
Consulting Editor, Journal of Operations Management
Director, Supply Chain Resource Cooperative


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We work with leading authors to develop the
strongest educational materials in management,
bringing cutting-edge thinking and best
learning practice to a global market.
Under a range of well-known imprints, including
FT Prentice Hall, we craft high quality print and
electronic publications which help readers to understand
and apply their content, whether studying or at work.
To find out more about the complete range of our
publishing, please visit us on the World Wide Web at:
www.pearsoned.co.uk


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Strategic Supply Management
Principles, Theories and Practice
Professor Paul Cousins
Professor of Operations Management
CIPS Professor of Supply Chain Management

The , Manchester Business School

Professor Richard Lamming
Director
School of Management, University of Southampton

Dr Benn Lawson
Senior Lecturer in Operations Management
CIPS Research Fellow
School of Management and Economics, Queen’s University Belfast

Dr Brian Squire
Lecturer in Operations and Supply Chain Management
The , Manchester Business School


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Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England
and Associated Companies throughout the world

Visit us on the World Wide Web at:
www.pearsoned.co.uk
First published 2008
© Paul Cousins, Richard Lamming, Benn Lawson and Brian Squire 2008
The rights of Paul Cousins, Richard Lamming, Benn Lawson and Brian Squire to be identified as authors
of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording or otherwise, without either the prior written permission of the
publisher or a licence permitting restricted copying in the United Kingdom issued by the
Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS.
All trademarks used herein are the property of their respective owners. The use of any
trademark in this text does not vest in the author or publisher any trademark ownership rights
in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement
of this book by such owners.
ISBN: 978-0-273-65100-0
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
10 9 8 7 6 5 4 3 2 1
12 11 10 09 08 07
Typeset in 10/12.5pt Sabon by 35
Printed by Ashford Colour Press Ltd., Gosport
The publisher’s policy is to use paper manufactured from sustainable forests.


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The authors would like to express their thanks to their families
for help throughout the years.
Joan and David Cousins, Julia, Tony, Ash and Elly
PDC
Leigh, Louise and Rosie Lamming
RCL
Norman and Dawn Lawson, Karen, Lauren, Kate and Corey
BRL
Cliff and Jill Squire
BCS


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Contents

List of figures
List of tables
List of boxes
Preface
Acknowledgements
Abbreviations

Part 1
THE FUNDAMENTALS OF SUPPLY

xvii
xx
xxi
xxii
xxiii
xxvi

1

Chapter 1
The supply challenge

3

Introduction
Structure of the book

Part 1: The fundamentals of supply
Part 2: Developing supply strategy
Part 3: Strategic issues in supply management
Part 4: Future directions
A note on terminology
Overview
Why should purchasing be seen as important to an organisation?
Summary
References
Endnotes

3
3
4
5
6
6
6
7
8
9
9
9

Chapter 2
The evolution of purchasing and supply management

10

Introduction

The evolution of purchasing
The 1940s–1960s: logistics
The 1970s: purchasing as an administrative function
The 1980s: purchasing as supply chain management
The 1990s: supply management and strategic decision making
Drivers of purchasing evolution
Political pressures
Economic pressures
Social pressures
Technological pressures

10
11
11
11
12
13
15
15
16
17
17


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viii Contents
The role of the purchasing function
Implementing strategy
Supporting strategy
Driving strategy
Judging purchasing’s contribution to strategy
Stage 1: Passive
Stage 2: Independent
Stage 3: Supportive
Stage 4: Integrative
Empirical taxonomies of purchasing
Strategic purchasers
Capable purchasers
Undeveloped purchasers
Celebrity purchasers
Moving between phases
The scope of strategic supply management
Summary
Seminar questions
References
Endnotes

18
18
18
18
19
20

20
20
20
21
21
22
22
22
22
23
24
24
25
25

Chapter 3
The make–buy decision: a theoretical perspective

27

Introduction
The make–buy decision
The inadequacy of neoclassical economic theory
The transaction cost approach
Behavioural characteristics
Transaction characteristics
TCE and the make–buy decision
TCE criticisms
The capability approach
Inimitability

Non-substitutable
Immobile
Resource-based view and the make–buy decision
Summary
Seminar questions
References
Endnotes

27
28
29
30
31
32
32
33
34
34
35
35
35
38
39
40
42

Chapter 4
Sourcing strategies and supply chain configurations

43

Introduction
Supply base reduction
Sourcing strategies

43
43
47


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Contents ix

Supply market complexity
Impact on business
Strategic directions for managing category spends
Supply structure and design
Single sourcing
Multiple sourcing
Delegated sourcing strategy
Parallel sourcing
Summary
Seminar questions

References
Further reading
Endnotes

48
49
50
52
52
53
54
55
57
57
57
58
58

Chapter 5
Strategic supplier selection

59

Introduction
Main stages of supplier selection
Step 1: Initial supplier qualification
Step 2: Agree measurement criteria
Cost criteria
Quality criteria
Delivery criteria

Flexibility criteria
Other criteria
Step 3: Obtain relevant information
Step 4: Make selection
Assign weights to criteria
Calculate criteria weights
Evaluate individual suppliers
Calculate supplier weights
Summary
Seminar questions
References
Endnotes

59
60
60
62
64
64
65
66
66
67
68
70
71
72
72
73
73

74
74

Chapter 6
Supplier development

75

Introduction
Defining supplier development
Objectives of supplier development
Supplier development strategies
Best practices in supplier development
The supplier development process
Step 1: Identify critical commodities
Step 2: Identify critical suppliers

75
75
78
81
83
83
84
84


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x Contents
Step 3: Form a cross-functional team
Step 4: Meet with supplier top management
Step 5: Identify key projects
Step 6: Define details of agreement
Step 7: Monitor status and modify strategies
Barriers to supplier development
Summary
Seminar questions
References
Endnotes

Part 2
DEVELOPING SUPPLY STRATEGY

85
85
86
86
86
86
87
87
87
88

89

Chapter 7
Supply strategy: the development of the strategic
supply wheel

91

Introduction
The origins of the strategic supply wheel
Rationale of the supply wheel
Appropriateness
Strategic planning tool
Linkage with sourcing strategies and Kraljic’s positioning model
Overview of each element
Alignment of corporate and supply strategy (Chapter 8)
Skills and competencies (Chapter 9)
Organisational structure (Chapter 10)
Strategic performance measures (Chapter 11)
Cost–benefit analysis (Chapter 12)
Relationship portfolio (Chapter 13)
Summary
References
Further reading

91
91
94
94

94
94
95
95
95
96
96
96
97
98
98
98

Chapter 8
Aligning supply with corporate strategy

99

Introduction
What is strategy?
Levels of strategy within organisations
What is strategic alignment?
Aligning purchasing and corporate strategies
The process of aligning supply and corporate strategies

99
101
102
103
104

105


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Contents xi

Developing corporate strategy
Setting corporate priorities
Translating competitive priorities into supply function objectives
Translating supply function objectives into supply chain practices
Summary
Seminar questions
References
Endnotes

106
107
108
108
109
109
109
110

Chapter 9
Competency and skills development for strategic supply

111

Introduction
The nature of skills, competency and competence
The integration of competencies and competences
Competency and competence requirements for strategic supply
Purchasing Competency Development Model
Step 1: Strategic stance
Step 2: Purchasing objectives and themes
Step 3: Prioritised competencies
Step 4: Development methodology
Step 5: Purchase integration
Step 6: Evaluation of benefits
Summary
Seminar questions
References
Further reading

111
113
115
117
119
120
122
122

122
123
123
124
124
124
125

Chapter 10
Organisational structures for supply management

126

Introduction
Conceptual framework
Applying the concepts: the development of organisational design
Challenges, issues and practical aspects: principal choices
for organising purchasing
Centralisation
Decentralisation
Atomisation
Federal structure
Hybrid systems
From classical to radical
Summary
Seminar questions
References
Endnotes

126

127
129
130
130
135
137
139
140
142
142
143
143
143


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xii Contents

Chapter 11
Performance measurement

144

Introduction
Performance measures as signalling devices
Cascading performance measures
The benefits of measurement
Problems with measurement
Key performance measurement concepts
Efficiency versus effectiveness
Why can cost-based measures be dysfunctional?
Financial and non-financial measures
Identify the stakeholders
Gaining buy-in
Categories of performance measures
Cost
Quality
Time
Supplier performance
Customer satisfaction
Developing a performance measurement system
Summary
Seminar questions
References
Further reading

144
145
146
147
148
149
149

150
150
152
152
152
153
153
154
154
154
155
159
160
160
160

Chapter 12
Cost–benefit analysis

161

Introduction
The measurement of costs
Price versus cost
Total cost of ownership
Uncovering the hidden costs of ownership
Summary
Seminar questions
References
Further reading

161
162
163
165
165
169
169
169
169

Chapter 13
Managing inter-firm relationships

170

Introduction
A strategic approach: the development of supply chain and
relationship management
Relationship definitions and misconceptions: towards a
management model

170
174
175


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Contents xiii

Development of a relationship management approach
The management of dependencies and certainties
The implementation of relationship management
The Partnership Life Cycle Effect
The Partnership Expectations Effect
The Partnership Desert Effect
Implications for managing relationships
Summary
Seminar questions
References
Further reading
Endnotes

Part 3
STRATEGIC ISSUES IN SUPPLY CHAIN MANAGEMENT

178
179
184
184
185
187
188

189
189
189
190
191

193

Chapter 14
Environmental and ethical issues in supply management

195

Introduction
Why should Purchasing be concerned?
Sustainability, green, and environmental soundness
Purchasing and supply management’s environmental contribution
Understanding pollution
Establishing a policy on environmental soundness
Strategy for minimising impacts
Risks for Purchasing and Supply managers
Implementation issues
Measuring environmental effectiveness
Supplier assessment
Strategy and senior management commitment
Summary
Seminar questions
References
Further reading
Endnotes

195
196
198
201
202
203
206
207
209
209
209
211
212
212
212
214
215

Chapter 15
Involving suppliers in new product development

216

Introduction
Advantages of ESI
Disadvantages of ESI
Selecting the right suppliers
The timing of supplier involvement

216
219
220
221
222


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xiv Contents
The extent of supplier involvement
Managing the involvement
Summary
Seminar questions
References
Endnotes

223
224
225
225
226
226

Chapter 16
Public and regulated supply management

227

The context
Introduction: the difference
What is public?
Why is the European Union relevant to UK public procurement?
What is a ‘significant’ level of spend?
The EC Directives and UK Contracts Regulations
Observing the thresholds
The procedures
Open procedure
Restricted procedure
Competitive dialogue
Negotiated procedures
Dynamic purchasing system (DPS)
Do the Directives work?
Examples of public sector procurement
Summary
Seminar questions
References
Further reading
Endnotes

227
228
228
230

230
231
234
235
236
238
239
240
241
241
242
242
243
243
243
244

Chapter 17
Electronic supply

246

Introduction
Development of the enabling technology
Electronic data interchange
Early Internet markets
Many to many: the emergence of hubs
Content on offer from exchanges
Online auctions
Summary

Seminar questions
References
Further reading
Endnotes

246
246
248
249
251
253
255
256
256
256
257
257


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Contents xv

Chapter 18

The relevance of commodities

259

Introduction
The principle of commodity
Types of commodity
Dealing with the problems of fluctuating prices
Private deals
Backward integration
Opportunistic buying
Buying on the future market
Summary
Seminar questions
References
Further reading
Endnotes

259
260
261
265
266
266
267
268
271
271
272
272

272

Chapter 19
Services procurement

273

Introduction
Service characteristics
Service classifications
Purchasing services: a taxonomy-based approach
Developing a strategy for services purchasing
Stage 1: Analysis
Stage 2: Focus
Stage 3: Contract development
Stage 4: Relationship strategy
Stage 5: Implementation
Stage 6: Feedback
Summary
Seminar questions
References
Further reading
Endnotes

273
274
278
280
283
283

284
284
285
285
286
286
286
287
287
287

Part 4
FUTURE DIRECTIONS

289

Chapter 20
The future – a trajectory for supply management

291

Introduction
Summary and conclusion of the book
Theory development in supply chain management

291
291
292

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xvi Contents
Future directions in supply management
What will supply management look like in the future
for practitioners?
The future for purchasing and supply – an allegory
Making sense of the allegory
Seminar questions
References
Further reading
Endnotes

293

Index

301

293
294
297
299
299

299
300


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List of figures

1.1
1.2
2.1
2.2
2.3
2.4
3.1
3.2
3.3
3.4
4.1
4.2
4.3
4.4
4.5
4.6

4.7
4.8
4.9
5.1
5.2
5.3
5.4
6.1
6.2
6.3
6.4
7.1
7.2
8.1
8.2
8.3
8.4
9.1
9.2
9.3
9.4
9.5
9.6
9.7

The pedagogical approach
The strategic supply wheel
Input, Transformation Output Model
Drivers of strategic purchasing
Taxonomy of purchasing functions

Changing unit of analysis in supply structure
Boundaries of the firm
TCE and the ‘make–buy’ decision
Transaction curve costs for make versus buy
The resource-based approach to the make–buy decision
The effects of supply base reduction
Kraljic product and service positioning matrix
Five forces shaping market competitiveness
The Pareto analysis: ABC
Single sourcing
Multiple sourcing
Delegated sourcing strategy
Parallel sourcing
Generic mapping of sourcing strategy and sourcing structures
Strategic supplier selection
Price versus total costs
The selection hierarchy
Using AHP to select suppliers
Supplier development and a world-class supply base
Supplier development outcomes
Typology of supplier development activity
Supplier development process
Three basic approaches to strategic supply
The strategic supply wheel
The strategic supply wheel
The process of strategic alignment
Matching supply chain strategy with products
The process of aligning supply and corporate strategies
The strategic supply wheel
The strategic alignment model

Roberts’ competencies framework
Strategic supply competency table
The Purchasing Competency Development Model
Relationship positioning matrix
Disaggregation of purchasing activities

4
5
12
16
21
23
28
31
33
36
45
47
48
50
53
53
54
56
56
61
63
69
70
76

79
80
84
92
93
100
103
105
106
112
112
115
117
119
120
121


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xviii List of figures
10.1
10.2
10.3

10.4
10.5
11.1
11.2
11.3
11.4
11.5
11.6
12.1
12.2
12.3
13.1
13.2
13.3
13.4
13.5
13.6
13.7
13.8
13.9
13.10
14.1
14.2
14.3
14.4
14.5
14.6
15.1
15.2
15.3

16.1
16.2
16.3
17.1
17.2
17.3
17.4
17.5
17.6
17.7
17.8
18.1
18.2

The strategic supply wheel
Centralisation of purchasing
Decentralisation of purchasing
Atomisation of purchasing
Federal structures in purchasing
The strategic supply wheel
Hierarchy of performance measures
Definitions
Categories of performance measurement
Designing a purchasing performance measurement system
A sample Purchasing Balanced Scorecard
The strategic supply wheel
Price/cost model
Purchasing’s activities contributing to total cost of ownership
The strategic supply wheel
Relationship resources

The strategic supply wheel
The Strategic Focused Outcomes Model (SFOM)
Strategic Relationship Positioning Model
Alignment of strategies, relationships and skills
The Partnership Life Cycle Effect
The Partnership Expectations Effect
Development of relationship sourcing strategies
The Partnership Desert Effect
The broad constituent elements of sustainable development
Matter cannot be destroyed, only converted
A process view of the business organisation
The waste hierarchy
The product stewardship concept
Development of Kraljic’s model to incorporate environmental concern
Design flexiblity and cost of design changes
Timing of supplier involvement
Extent of supplier involvement
The open procedure for public contracts
The restricted procedure for public contracts
The negotiated procedures for public contracts
Electronic data interchange
One-to-many e-commerce
The emergence of exchanges or hubs: late 1990s
Collaboration between exchanges or hubs
Direct content from several suppliers to a private exchange
Aggregated content from a site containing several sources of
goods and services
The portal principle
The portal principle, showing a recommendation’s service
Simplified representation of the relationships between commodity price

and the futures price: ‘a perfect hedge’
A more realistic representation of the relationships between commodity
price and the futures price: ‘complex hedging’

127
131
135
138
139
145
147
149
153
155
159
162
164
167
171
173
176
177
179
183
184
185
187
187
200
202

204
205
206
210
218
222
223
236
238
240
249
250
251
252
253
254
254
254
269
269


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List of figures
19.1
19.2
19.3
19.4
19.5

The service delivery programme
Purchasing services matrix
Stages in the development of a purchasing services strategy
Focus of services
Implementation – the wave approach

xix
275
281
284
285
286


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List of tables

2.1
3.1
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
6.1
8.1
11.1
11.2
12.1
13.1
13.2
16.1
16.2
18.1

Strategic stages in the development of a purchasing function
Summary of the assumptions of Transaction Cost Economics
Requests for proposals, information and quotations
Criteria for supplier selection
Selection criteria for functional versus innovative products
Measurement scale for pairwise comparisons
Pairwise comparison matrix (original matrix)
Calculating criteria weights (adjusted matrix)

Pairwise comparison of suppliers for innovation, quality and price criteria
Final weights and comparison of alternatives
Key barriers to successful supplier development
Competitive priorities for supply
Value-adding activities which Purchasing may undertake
Characteristics of effective performance measurement systems
The total cost of ownership matrix
The four key dependencies
The four levels of certainty
Thresholds from 31 January 2006
Thresholds: Utilities sectors from 31 January 2006
Examples of major commodity exchanges

19
30
61
63
67
70
71
71
72
72
87
107
151
156
168
180
182

233
233
265


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List of boxes

1.1
1.2
2.1
2.2
2.3
3.1
3.2
3.3
4.1
4.2
5.1
5.2
5.3
5.4
6.1

6.2
7.1
7.2
8.1
8.2
9.1
9.2
10.1
11.1
12.1
12.2
13.1
14.1
14.2
15.1
15.2
15.3
18.1
18.2
18.3
19.1
19.2
19.3
19.4

Traditional view of the impact of purchasing
Growth in supply chain consultancy
Supply strategy as the delivery of corporate strategy
Palm Computing
Integration of supply chain activities

Supply in action: Vertical integration in the oil and gas industry
Discussion: Is RBV a complete theory?
Supply in action: Developing contact lens capabilities at Johnson
and Johnson
Examples of strategic supply base reduction
Automotive industry supply delegation
Supply in action: Fire at Ericsson
Critique of quality certification
What are multi-criteria decision-making models?
Limitations of AHP
Supplier development at John Deere
Saint Gobain
Strategic alignment
The cost of business
Strategic alignment in the public sector
A definition of strategy
Criticisms of competency-based approaches
Could you be a world-class Supply Strategist?
North West Universities Purchasing Consortium Limited
Comet introduces supply chain performance measurement
Dissatisfied customers
The true cost of ownership?
How hard is it to define a relationship?
Social policies
Mobile phones and African wars
Supplier involvement at Delphi
Developing joint technology roadmaps
ESI at Smart
Oil prices dive on plane bomb plot
Rising fuel prices take their toll

Using hedges to reduce risk: simple examples
An example of a service level agreement
New computer system for NHS to improve patient care
NHS IT upgrade – managing a multi-million pound project
New action for cleaner, safer hospitals, UK

8
9
14
15
24
29
37
38
44
55
60
65
69
73
77
81
94
97
100
101
116
118
132
146

163
166
172
200
201
217
220
224
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268
270
277
278
279
283


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Preface

The original idea for this book emerged in 2002: four years ago, as we write this
page. It began with Paul Cousins and Richard Lamming discussing the lack of a
structured strategically focused text for teaching supply management. Instead of

bemoaning it, we decided to write the text ourselves. Having embarked on the
exercise we realised why such a text did not exist! The subject area is vast, wide
ranging and still developing. During the first few years of the project, Richard took
up the Directorship of the School of Management at the University of Southampton
and Paul spent time working in Melbourne, Australia, at Queen’s University Belfast
and eventually settled at Manchester Business School, The .
In 2005 we decided that this book would not be completed without further authors.
It was at this point that we recruited Dr Benn Lawson (Queen’s University Belfast)
and Dr Brian Squire (Manchester Business School) to help with the writing. This
proved to be an excellent choice and both Benn and Brian have worked extremely
hard to make the book into what it is today.


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Acknowledgements

Authors’ acknowledgements
Creating a book of this size and time scale involves a large number of people in
addition to those listed on the front cover. This section affords us the opportunity
to formally thank those people that have supported us and enabled this book to
come to fruition.
First, we should like to thank those people who have had a direct involvement
in the production of the book. One of the most important people in helping us to

get organised and deliver this text on time was Lesley Gilchrist. Lesley has worked
tirelessly with us: she has helped to typeset the entire text, kept us focused and
made sure everything was presented in a coherent and uniform manner. We are
very grateful to Lesley for her help and professional attitude: thank you, Lesley.
Secondly, we would like to thank our Research Assistant Craig Artley. Craig has
provided background research for every chapter. He has also helped in the management process. Craig leaves us in September 2006 to pursue a postgraduate degree
and we wish him well with his future endeavours. Third, we should like to acknowledge the important contribution to Chapter 16 made by Mr Fred Harvey, one of
the UK’s leading experts on European Procurement regulation. Finally, we would
like to thank Sam Alford who took over the management of the book and through
her perseverance and tenacity made sure that the authors delivered a timely and
quality product – thanks very much, Sam.
Next, we should like to thank our anonymous reviewers for their helpful and
encouraging comments. We would also like to thank our publishers, commissioning editor and editorial adviser Matthew Oxenham and in the latter stages Matthew
Smith for his management of this book project.
Finally, we should like to thank our families, friends and partners for supporting us during the writing of this text. Anyone who has taken on a large project
will know how time consuming and draining such a project is. Whilst work colleagues can offer professional support, it is families and friends that take most of
the strain. We would like to thank them for their help and support. Specifically
we would like to thank Leigh Lamming, Jennifer Cassels and Karen Coyle.

Publisher’s acknowledgements
We are grateful to the following for permission to reproduce copyright material:
Figure 1.2, Figure 7.2, Figure 8.1, Figure 9.1, Figure 9.6, Figure 10.1, Figure 11.1,
Figure 12.1, Figure 13.1 and Figure 13.3 reprinted from European Journal of


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xxiv Acknowledgements
Purchasing and Supply Management, 8 (2), Cousins, P. D., A conceptual model
for managing long-term inter-organisational relationships, 71–82, Copyright
(2002), with permission from Elsevier; Figure 2.4 from Developing the concept of
supply strategy in International Journal of Operations & Production Management, Emerald Group Publishing Limited (Harland, C. M., Lamming, R. C. and
Cousins, P. D. 1999); Table 2.1 this article was published in Journal of Purchasing
and Materials Management, 24, Reck, R. F. and Long, B. G., Purchasing: a competitive weapon, pp. 2–8, Copyright Elsevier (1988); Box 2.1 from www.clearspeed.com, ClearSpeed Technology plc (note that information published on the
ClearSpeed Website may be subject to change); Figure 2.3 from An empirical
taxonomy of purchasing functions, in International Journal of Operations and
Production Management, Emerald Group Publishing Limited, (Cousins, P. D.,
Lawson, B. and Squire, B. 2006); Figure 3.3 reprinted from Comparative
Economic Organization: The Analysis of Discrete Structural Alternatives by Oliver
E. Williamson published in Administrative Science Quarterly, Volume 36, June by
permission of Administrative Science Quarterly, Volume 36. © Johnson Graduate
School of Management, Cornell University; Box 3.3 from Twenty five years of contact lenses: the impact on the cornea and ophthalmic practice in Cornea: The Journal
of Cornea and External Diseases 19 (5), pp. 730–40, Lippincott, Williams & Wilkins
(McMahon, T. O. D. and Zadnik, K. 2000); Figures 4.2 and 9.4 from Purchasing
must become supply management in Harvard Business Review, Harvard Business
School Publishing (Kraljic, P. 1983); Figure 4.3 adapted with the permission of
The Free Press, a Division of Simon & Schuster Adult Publishing Group, from
COMPETITIVE ADVANTAGE: Creating and Sustaining Superior Performance by
Michael E. Porter. Copyright © 1985, 1998 by Michael E. Porter. All rights reserved;
Figure 6.3 from Sako, M., Supplier development at Honda, Nissan and Toyota:
comparative case studies of organizational capability enhancement, Industrial
and Corporate Change, (2004), 13 (2), pp. 281–308, by permission of Oxford
University Press; Box 6.2 from www.unctad.org, United Nations; Figure 6.4 from
Avoid the pitfalls in supplier development in MIT Sloan Management Review

(Handfield, R. B. et al. 2000). Copyright 2000 by Massachusetts Institute of
Technology. All rights reserved. Distributed by Tribune Media Services; Box 8.2
from Strategies for Change: Logical Incrementalism, © The McGraw-Hill Companies, Inc., (Quinn, J. B. 1980); Figure 8.3 from What is the right supply chain
for your product? in Harvard Business Review, Harvard Business School Publishing (Fisher, M. 1997); Box 8.1 from Align buying and corporate strategies,
chairman urges in The Journal of Supply Chain Management, Blackwell Publishing (Arminas, D. 2002); Figure 11.6 Copyright © 1996, by The Regents of the
University of California, Reprinted from the California Management Review, Vol.
39, No. 1. By permission of the Regents; Table 12.1 from A smarter way to buy
in Harvard Business Review, Harvard Business School Publishing (Degraeve, Z.
and Roodhooft, F. 2001); Box 12.1 from Achieving world-class supplier quality
by Trent, Robert J. and Monczka, Robert M., Total Quality Management & Business
Excellence, (1999), reprinted by permission of the publisher (Taylor & Francis Ltd,
); Figure 12.3 from Purchasing: the cornerstone of
the total cost of ownership concept in Journal of Business Logistics, Council of
Supply Chain Management Professionals (Ellram, L. M. and Perrott-Siferd, S. 1993);