The supply base reduction process: an empirical investigation

Abstract

Purpose This research seeks to better understand the supply base reduction approaches and processes utilized by organizations. Design/methodology/approach In‐depth case studies were conducted with ten organizations that recently reduced their supply bases. These organizations represented a variety of industries, type of product or service being purchased, and number of suppliers reduced from the supply base. Findings Three different types of supply base reduction approaches are identified (systematic elimination, standardization, and tiering), examples of each are provided, and guidance is provided about situations in which each would be useful. A basic supply base reduction process is developed and outlined based on the similarities observed among these three different approaches. Practical implications A better understanding of these supply base reduction approaches and processes can help organizations successfully implement such efforts by learning from the experiences of other organizations. Originality/value Many of the case study respondents commented on the lack of literature pertaining to supply base reduction approaches and processes. Consequently, many of the case study organizations had to perform extensive benchmarking or hire outside consultants to learn more about supply base reduction approaches and processes prior to implementing them within their various organizations. This paper is the first step in filling the void in the literature concerning supply base reduction approaches and processes.

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