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Supply chain risk-sharing contracts from a buyers' perspective: content and experiences

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  • Andreas Norrman

Abstract

Incentive alignment, and risk and gain sharing, are argued to be key factors for the successful implementation of Supply Chain Management (SCM). Incentive-related issues can be improved by contract based, information-based and trust-based solutions. The focus of this article is on contract mechanisms used in the context of high demand volatility, supply allocation and outsourced supply chains. Two case illustrations from a high-tech industry (Agilent and Hewlett Packard) describe recently implemented risk-sharing contracts, as well as experiences and issues regarding their implementation from a buyers' perspective. Although the work of implementing these more formal contracts is demanding, buyers are pleased with the results and the buyers also report pleased suppliers. In the cases, the main barrier to implementing risk-sharing contracts seems to be the shift in mindset and culture needed internally, especially among purchasers.

Suggested Citation

  • Andreas Norrman, 2008. "Supply chain risk-sharing contracts from a buyers' perspective: content and experiences," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 1(4), pages 371-393.
    • Handle: RePEc:ids:ijpman:v:1:y:2008:i:4:p:371-393
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    Citations

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    Cited by:

    1. Leonel Arango Vásquez & Eduardo Alexander Duque Grisales & Germán Horacio Cardona Vélez, 2014. "La teoría de la agencia en la industria del capital riesgo: mecanismos de alineación de intereses," Escenarios: Empresas y Territorio, Institución Universitaria ESUMER, January.
    2. Fan, Huan & Li, Gang & Sun, Hongyi & Cheng, T.C.E., 2017. "An information processing perspective on supply chain risk management: Antecedents, mechanism, and consequences," International Journal of Production Economics, Elsevier, vol. 185(C), pages 63-75.
    3. Li, Gang & Fan, Huan & Lee, Peter K.C. & Cheng, T.C.E., 2015. "Joint supply chain risk management: An agency and collaboration perspective," International Journal of Production Economics, Elsevier, vol. 164(C), pages 83-94.
    4. Reza Yazdanparast & Reza Tavakkoli-Moghaddam & Razieh Heidari & Leyla Aliabadi, 2021. "A hybrid Z-number data envelopment analysis and neural network for assessment of supply chain resilience: a case study," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 29(2), pages 611-631, June.

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