RESEARCH ISSUES

SHAWNEE VICKERY, Feature Editor, Eli Broad Graduate School of Management, Michigan State University

A TRIANGULATED APPROACH TO EMPIRICAL RESEARCH:
THE GLOBAL PROCUREMENT AND SUPPLY CHAIN BENCHMARKING INITIATIVE

by Robert B. Handfield, Gary L. Ragatz,
and Robert M. Monczka
The Eli Broad Graduate School of Management,
Michigan State University

In recent issues of Decision Line, contributors to this column have discussed the pros and cons of empirical research versus theoretical research (Carter, March 1994; Ghosh, January 1995; Meredith, March 1995). Most recently, Jack Meredith discussed the pros and cons of adopting a theory-testing versus theory-building approach to empirical research. He ended with the laudable call for OM academics to ensure that their research is worthwhile to practitioners.

Despite the inherent appeal of this call, its application can be difficult given our field's bias towards statistical methods. Moreover, academics and practitioners often differ in their impressions of what constitutes þworthwhile research.þ Practitioners need to know the answer to the question þWhat do I need to do to make it happen?þ, whereas academics often prefer a high-level conceptual model of the relationship that can be supported by statistical testing.

In spite of these differences, two areas of research have received a significant amount of interest from both academics and researchers in the last few years: benchmarking and supply chain management. Benchmarking is a critical activity for managers to undertake, yet few business professionals have the research skills to make benchmarking a complete success. Also, the cost to benchmarkers and benchmarkees often make such initiatives too expensive to undertake, both in terms of time and money. In an effort to fill this need, a research initiative is underway in The Eli Broad Graduate School of Management at Michigan State University that seeks to provide benchmarking and best practices information to purchasing and materials managers, with a focus on contributing to theory building and theory testing in the field. Early results from the project suggest it is possible to conduct empirical research that contributes to practitioner's knowledge, and yet is theoretically and methodologically rigorous.

The MSU research team (composed of faculty, graduate students, industry associates, and operations support staff) has a multi-pronged applied research effort in purchasing and supply chain management well underway. The research focuses on (1) establishing a worldwide network of about 250 firms, electronically linked to Michigan State University, which would enable an ongoing þGlobal Procurement and Supply Chain Benchmarking Initiativeþ to obtain current and emerging strategies and þmost advanced practicesþ; and (2) conducting worldwide field research to identify best-in-class purchasing and supply chain management strategies and practices.

The specific objectives of the research follow.

1. Identify current and future purchasing/ sourcing and supply chain management strategies and best practices being used to address current and emerging competitiveness issues and market situations.

2. Establish current and future performance data for key purchasing and supply chain management effectiveness performance indicators (e.g., cost reduction, asset management, and so forth).

3. Establish linkages between purchasing/ sourcing and supply chain management strategies and approaches and measurable performance (e.g., establishment of a standardization program and its relationship to ongoing cost reductions; or supplier performance measurement and cost, quality and delivery; or early sourcing and quality, cost, and field failure).

4. Develop a longitudinal set of performance and strategy information to identify "what really works" "what doesn't," and "why."

5. Identify the leading edge/most advanced sourcing and supply chain management strategies and practices throughout the value chain, from product inception through product discontinuance, and how firms may utilize identified strategies/best practices to move from their current status position (i.e., basic, moderately advanced, etc.) to obtain most advanced status.

The project requires multiple methods of data collection. Once every three months, two of the twelve research module areas are completed. Prior to distributing a module across the network, the team conducts an in-depth literature survey of the topic, and develops a set of broad propositions regarding the relationship between that dimension of sourcing strategy and performance. A structured questionnaire is then developed and distributed to all Global Procurement and Supply Chain Electronic Benchmarking Network (GEBN) Benchmarking Partners to collect written responses on their firms' implemented and planned strategies/best practices and corresponding implementation processes, enablers, results, and on-going objectives. Based on a rigorous application of qualitative data analysis procedures (see Miles and Huberman, 1994), each strategy is coded and classified as either þMost Advanced,þ þModerately Advanced,þ or þBasic.þ A profile of each classification type is included in the report to practitioners. A second part of the questionnaire includes þcheck-offþ questions that are used in statistical testing of the propositions. Finally, on-site visits to leading edge companies are carried out at the completion of each module. Through the triangulation of qualitative and quantitative data, a more complete, holistic, and contextual portrayal of the research issue is captured (Jick, 1979). In addition, two objectives are achieved. A body of knowledge that provides ongoing and critical information about current and future purchasing/sourcing/supply chain issues, leading strategies and best practices is developed. This section of the report is of primary interest to purchasing professionals. In addition, empirical testing of the underlying propositions and hypotheses explaining these relationships is conducted, thereby contributing to theoretical development in the field. Although this section of the initiative is perhaps of less interest to practitioners, it is important. As one vice president of procurement noted, "I get a good feeling when best practice information can be supported by statistical evidence."

The preliminary pilot module was completed in late 1994 with complete results reporting being released to GEBN Partners in April 1995. The purpose of this module was to establish data coding methods and provide a set of best practice baselines for future investigation. Companies were asked to provide their five best strategies and practices. These were subsequently grouped into the following categories and will be investigated based on priority rankings obtained from benchmarking partner companies:

-- Strategic Supplier Alliances and Partnerships
-- Best Commodity/Purchase Family Supply Base/Sourcing Strategies and Practices
-- New Product Development and Supplier Integration
-- Cross-Functional, Cross-Location and Business Unit Integration
-- Integrated Supply Chain Management, Including Logistics
-- Procurement and Supply Chain Performance Measurement, Including Total Cost/Value
-- Globalization
-- Procurement and Supply Chain Organization Strategies and Practices
-- Supplier Development, Including Quality Management
-- Enabling Information Systems and Technology
-- Human Resource Development and Training
-- Specific Indirect/Non-Production Purchasing Strategies and Practices

Data collection for the first two regular module areas, "Strategic Supplier Alliances," and "Best Commodity Strategies" is currently underway. Partial funding for an additional dimension to "The New Product Development" module, "Integrating Suppliers into the Product Value/Supply Chain" has been provided by the National Science Foundation's "Transformation to Quality Organizations" program. Additional funding for this project is being provided by The Global Procurement and Supply Chain Benchmarking Initiative and Michigan State University. This project involves developing an explanatory model for the integration of suppliers into the new product development process, as well as establishing an understanding of successful and unsuccessful supplier integration strategies and practices that will lead to the development of a comprehensive set of implementation guidelines for firms to follow. To ensure application of research findings in both industry and academic circles an Industry Executive Review Team (IERT) and Academic Review Team (ART) have been formulated to provide insights and perspective.

While there will always be pitfalls to empirical investigation, researchers can improve the validity and application of their research by utilizing triangulated data analysis. This initiative is an example of the type of benchmarking effort that is possible using electronic networking capabilities and field data collection on a worldwide basis. The methodology allows us to compare and contrast firms anonymously across important criteria so that firms may be able to better position themselves against other leading firms. Our plan is also to link partner companies' key suppliers into the worldwide electronic benchmarking research network. Although the research is not expected to supplant classic benchmarking visits entirely, the outputs will undoubtedly be used in managerial strategy formulation. In addition, it is expected to provide a stream of publishable research, doctoral dissertations, and theoretical contributions in the field of purchasing and supply chain management.

References

Jick, T.D. Mixing qualitative and quantitative methods: Triangulation in action, Administrative Science Quarterly, Vol. 24, 1979, pp. 602-611.

Miles, M B., and Huberman, A. M. Qualitative data analysis: A sourcebook of new methods. Newbury Park, Ca.: Sage Publications, 1994.

Robert B. Handfield is Assistant Professor of Purchasing and Operations Management at Michigan State University. His research combines qualitative and structural modeling approaches to the study of time-based competition, quality management and strategic sourcing. He has presented a number of seminars on these topics to materials managers, and also serves on the editorial review board of the Journal of Operations Management and Decision Sciences.

Gary L. Ragatz is Associate Professor of Operations Management at Michigan State University. He is a vice president of the Decision Sciences Institute, president of the Midwest Region of the Decision Sciences Institute, area editor for Production and Operations Management, and serves on the editorial review board of the Journal of Operations Management. His current research focuses on industry best practices in integrated supply chain management, and short-term scheduling/capacity planning systems.

Robert M. Monczka is director of The Global Procurement and Supply Chain Benchmarking Initiative, and Professor of Strategic Sourcing Management and The National Association of Purchasing Management Professor at Michigan State University. His current research efforts are directed at procurement/sourcing and supply chain strategy. Outside the academic arena, his career consists of consulting and research with more than 150 international organizations.

Dr. Shawnee Vickery
Department of Management
College of Business
239 Eppley Center
Michigan State University
East Lansing, MI 48824
517-353-5415
fax: 517-336-1111