The supply base and its complexity: Implications for transaction costs, risks, responsiveness, and innovation

Abstract A supply base is defined as the portion of a supply network that is actively managed by a buying company. The buying company, referred to as the focal company, manages the suppliers in the supply base through contracts and purchasing of parts, materials, and services. To facilitate better management of a supply base, we observe “complexity” as a key area of managerial consideration and apply the literature on complexity to the supply base. Supply base complexity is conceptualized in three dimensions: (1) the number of suppliers in the supply base, (2) the degree of differentiation among these suppliers, and (3) the level of inter‐relationships among the suppliers. Four propositions have been…

• NS
  National Science Foundation

  Award: DMI‐0075293