Universitat Autònoma de Barcelona
3.1 La perspectiva del modelado estadístico
3.1.1 Modelado y modelado estadístico
Selection is concerned with the alignment of organisational goals and supply chain
capability to facilitate effective delivery. It is considered that no supply chain
relationship can exist without a corresponding purchaser relationship, and thus
responding to and understanding one’s own supply market is inherently the basis upon
which procurement and delivery strategy is based. The identification, appraisal,
management, development and structure of supply markets are vital to any delivery
process, and as such, the extent to which these delivery markets can influence and be
shaped by the purchasing organisation must be identified. Consideration is given to the
level of supply chain relationship and integration appropriate for the purchaser’s needs,
inclusive of the level of autonomy, competition, collaboration and resultant engagement
required to achieve effective delivery. Selection consequently begins to take on a
number of other elements, namely, tendering, supplier development and the number
and type of market relationships required.
Selection as part of a strategic approach
However one views delivery and market engagement, and whether the desire is to
engage singularly or for extended periods, the focus is essentially on selection based on
competition or co‐operation (Hughes et al., 2006). This is an important concept, as more
competitive forms of selection focus on price via open and selective tendering practices,
with cooperative forms adopting negotiation and non‐cost related parameters. As Cox
and Townsend eluded in 1998, there is considerable market advantage to be gained
from developing relationships with a supply base. Consequently, the alignment of
selection, tendering and development practices need to reflect the appropriate use of
procurement methodologies. While some single project approaches exist such as two
stage tendering (stage 1 based on preliminaries, profit and overheads; stage 2 based on
open book negotiations, design development, coordinating final prices and often some
reimbursement of costs), there is naturally going to be a discrepancy in delivery practice
should monitor their performance and find optimal working relationships as part of
more relational approaches, opposed to mere price (and risk) handover with
transactional forms of procurement.
What constitutes a strategic approach to Selection?
Hughes et al. (2006) present that selection methods include negotiation, partnering,
frameworks, selective competition and open competition. Walker and Maqsood (2008)
in outlining the value of forming supply relationships, suggest that more committed
forms of supply that coalesce, opposed to singular competitive types of approach
experience increasing value through higher levels of trust, commitment, knowledge
sharing and joint coordinated problem solving. As Miles and Snow (1992) elude, a fit
between operational delivery and strategic aims is more likely to achieve organisational
goals and objectives, thus the selection of suppliers needs to align to the nature of the
procurement methodologies being employed. The result being the alignment of
competitive price based practices for transactional forms, and non‐price selection
criteria for more relational forms in order to demonstrate alignment to business goals.
Cox and Townsend (1998) suggest that traditional arm’s length contracting in the
construction sector has led to procurers being uncomfortable with the ideas of supplier
development or relational forms of tendering and selection. As Turner and Simister
(2001) found uncertainty to have the greatest influence on contract type selection by
clients, and with tendering contractors needing to incorporate failed bids and expensive
bidding process into overheads, there is little wonder that serial and relational forms of
contracting seek to minimise such actions and cost. Gunning and McDermott (1997)
bring an insight into the inflation of tender prices so far as contractors will inflate bids to
incorporate unknowns at the simplest level. As higher levels of risk and complexity
versus value and price inherently determine selection of procurement methodologies
(Kraljic, 1983), then construction procurement vehicles that fail to adhere to the basis
upon which they were formed will inherently lead to low performance. In short, Hughes
et al. (2006) present that tendering costs alone can count for between 0.5 and 1% of
Consequently, with selection of suppliers to form more relational and cooperative forms
of delivery to experience increased levels of productivity, one must work closely with,
and develop one’s supply chain. As Lamming and Cox (1995) allude to in the four
dimensions of supply, being able to analyse, understand and transform power structures
in supply chains is required in order to demonstrate a dynamic and proactive (effectively
strategic) supply chain competence. This means being able and willing to modify supply
chains to leverage value, improve performance and get a better deal as a procuring
organisation, but with the goal of it working for the supply chain too. Emmett and
Crocker (2008) present this idea nicely in their presentation of a manufacturer entering
the supply chain to develop a logistics partner. In forming a reliable second sourcing
option against a poorly performing single source relationship in existence, all three
organisations experienced increased productivity, turnover and performance.
Similarly, as Liu et al. (2009) present that transactional mechanisms curb opportunism,
and relational mechanisms improve relationship performance, they add that improved
performance and the curbing of opportunism can in fact come from the joint
implementation and improvement of both trust and contract. What this means is that
the development of the supply chain across more relational forms of contract is a
cornerstone to a strategic approach and vital in delivering improved performance (Cox
and Townsend, 1998). To do this then one must understand clearly that transactional
spot contract approaches take the market as it is, whilst strategic approaches encourage
the forming and leveraging of supply power to engender improved performance and
resource allocation. In fact, understanding the co‐development (Van Echtelt et al., 2008)
of client and supplier, as well as the co‐creation (Prahalad and Ramaswamy, 2004) of
products and ideas across more long term cooperative delivery forms is vital to the
implementation of a strategic approach and the utilisation of supply competence.
4.2.3.4 Cost