Editorial

Volume 21, Number 2 Article by V Ravi Anshuman June, 2009

Editorial :

This issue of IIMB Management Review(IMR),focusing on global sourcing and supply management brings a selection of papers and features on the theme,including some of the papers presented and the panel discussions held in the IMR 2008 Conference on Global Supply Chain Management: Role of Emerging Economies,organised jointly by IIMB Management Review, the Supply Chain Management Centre, and the EADS-SMI Chair for Sourcing and Supply Management.I would like to thank Prof Roger Moser and Prof Devanath Tirupati, the guest editors for their stewardship of this theme-based issue, and leave it to them to introduce the papers and features to you.

The issue also includes our regular features and I look forward to hearing from you on it

IMR Special Issue on Sourcing and Supply Management

Sourcing and supply management are two terms that have not yet appeared very prominently on the agenda of corporate India, in the newspapers, in conferences and in board meetings but are increasingly gaining the attention of senior executives around the world. In addition, these two terms also express the major purpose of the EADS-SMI Endowed Chair for Sourcing and Supply Management at the Indian Institute of Management in Bangalore which was established in 2007. Why has there been a much stronger focus on these topics in the corporate world recently? It seems that Peter Drucker's perception of the importance of sourcing and supply management has been finally recognised by companies around the world:'Nowhere in business is there greater potential for benefiting from interdependence than between customer firms and their suppliers. This is the largest remaining frontier for gaining competitive advantage - and nowhere has such a frontier been more neglected.' (Peter Drucker, 1982, The Changing World of the Executive, Truman Talley Books, Times Books, New York)

Consequently, supply management is seen today as the(at least for now) final stage of the evolution of the purchasing function from a purely clerical activity within the manufacturing process to an independent strategic enabler to create competitive advantage. Thus, supply management stands for a new mindset and a new breed of people that manage in different roles the input flow of goods, services and increasingly even people and money as decision makers, operational supporters or expert advisors.

Second, sourcing nowadays often refers to a process-driven perspective when organising the inflow of resources for a focal company. This process often starts with the demand management of the various functions and continues with supplier selection and development until the fulfilment has been done and the accounts payables have one item less in their records. Sourcing therefore also includes various logistics challenges and is used in different contexts from make-or-buy decisions (outsourcing) to the geographical aspects (global sourcing). From a meta perspective, both elements therefore fit into the terminological umbrella of what many managers and academics call supply chain management.

From this short description it becomes evident already that a special issue on sourcing and supply management cannot cover even a minor part of all the relevant topics that could be covered. The Chief Editor and the two Guest Editors have therefore chosen a selection of articles, interviews and round tables covering a wide area of aspects. First, the interview with Mr Hans Mundt, Chief Purchasing Officer of EADS, discusses the current sourcing challenges of this global leader in the aerospace industry and also reveals some personal insights of one of the most experienced CPOs in the high-technology sector about career choice and skill requirements as a supply manager. The connected context note first discusses the evolution from purchasing to supply management, including the major obstacles in the move from one evolution level to the next and then presents a short overview of the structure and activities of EADS.

With a similar focus, the article 'A Structural Model of Purchasing and Supply Management Effects on Performance' discusses the results of a global study on best practices in purchasing and supply management (PSM) proving the impact of PSM on corporate success and especially highlighting the relevance of soft factors such as mindset and sourcing skills in order to become a world-class PSM organisation.

A detailed analysis of logistics managers in China and their required skillset is also provided by the article 'Skill Requirements for Logistics Managers in China'.The authors evaluate which kinds of skills are important in the specific context of the Chinese infrastructure and industry setting and provide valuable insights into this special market.

The article, 'BPCL Supply Chain Optimisation: Building a New Approach' emphasises again the strategic relevance of the new mindset in sourcing and supply management from a specific company perspective in the Indian context. The Supply Chain Optimisation (SCO) Department at BPCL, for example, defines its role not by pursuing individual objectives as compared to other functions such as marketing or finance but rather by optimising the net corporate realisation creating real bottom line impact. The article 'Supply Chain Collaboration in Distributor-Dealer Networks' focuses on the important aspect of collaboration between different entities of a supply network. It highlights the importance of different communication tools and interaction forms in order to achieve optimal results.

Finally,the Round Table Discussion on 'Supply Chain Risk Management' highlights the strategic importance of supply chain management in today's globalised world with a panel of experts from the industry sharing their perspectives on risk management and mitigation. Prof Janat Shah, the anchor of the Round Table and guest editor of the feature, shares the findings from research on the subject.

In summary,this special issue on sourcing and supply management intends to bring this special focus of supply chain management to the attention of a larger audience in India and abroad consisting of both managers and academics.

We wish the readers an interesting time and hope that they get some useful insights for their work in the corporate or academic world.

Thank you
V Ravi Anshuman
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