Exploration of the Strategic Sourcing Orientation in Automotive Industry - A Study Examining the Strategic Sourcing Orientation for Original Equipment Manufacturers in the Automotive Industry and Connecting it with the Agility of the Firms’ Supply Chain

Abstract

Automotive industry is constantly changing, which has put an excessive stress on processes within the Original Equipment Manufacturers supply chain. The process of sourcing strategies is one major source to a firm’s supply chain agility. Seeking higher agility for OEMs could turn crucial in the dynamic automotive industry, in parallel with the upcoming era of electric vehicles. Sourcing models that are utilized by OEMs when cooperating with suppliers, reveal the degree of a supplier’s integration into the supply chain. Additionally, the relational view of the transaction cost favors the strong integration and attachment between suppliers and OEM in technology-intensive industry, as the incentives for investments are significantly higher. However, the fairly new concept of Strategic Sourcing Orientation has emerged in the academic literature, which challenges the idea of Strategic Sourcing and its implications on agility. Strategic Sourcing Orientation is defined as the cognitive behavior in internal sourcing teams, where the team could behave on the basis of four dimensions; learning, performance, planning and relational. By scrutinizing three traditional OEMs and one electrical OEM in their respective markets, a comparison between their individual Strategic Sourcing Orientation and Firm’s Supply Chain Agility showed a connection between these two concepts. The traditional OEMs were performance-oriented, while the electrical OEM were learning and relational-oriented. Furthermore, the differences in the Firms’ Supply Chain Agility were not significant, which would have been if the concept of sourcing models would be accurate, as the suppliers of the electrical OEM were more integrated into their supply chain.