دیدگاه تامین کنندگان درباره ارتباط با تأمین کنندگان در قرارداد مبتنی بر عملکرد

As companies are concentrating on core competencies, they increasingly require their suppliers to provide full solutions rather than individual offerings. Many of these solutions, a specific one being “performance-based contracting” (PBC), require a systems integration approach from the providers, who strongly depend on their sub-suppliers’ contributions. Yet, while research on PBC is increasing and some implications for the customer–provider relationship have been identified, no study has been undertaken to analyse the implications of PBC on the upstream suppliers, specifically how the relationship is impacted by results-oriented concepts such as PBC, how suppliers are aligned to the PBC outcome and how they participate in the performance-based compensation. This paper seeks to address this gap, combining a theoretical approach and an empirical approach. The challenges resulting from PBC on the supplier relationships of PBC providers are first analysed from an information economics perspective. Then, a case study approach with insights from typical PBC industries such as defence or aerospace was used to validate and enhance the study. The findings show that despite opposing assumptions in previous literature, PBC suppliers are not involved into the concept’s specifics in a dedicated way, giving away the potentials of a proper alignment. Based on this, a governance portfolio model for the PBC providers’ supplier relationships is developed. The paper is concluded with managerial and theoretical implications.

In an age of strongly increasing focus on core competencies, the inputs of external suppliers and providers play a major role in a company’s success (Gottfredson et al., 2005 and van Weele and Rozemeijer, 1996). Lean or virtual enterprises are the result. These no longer require individual products and services from their suppliers, but rather look for the provision of integrated bundles of services and products (also “solutions” or “product-service-systems”) to solve a distinct customer problem (Meier, 2004 and Vandermerwe and Rada, 1988). Yet, despite the increased demand for solutions, research on how to procure services, specifically solutions, is still scarce, if at all existent (Ellram et al., 2007 and Nordin and Agndal, 2008). At the same time, buyers claim that buying product–service-packages is far more complex than the procurement of goods or “pure” services, and they claim that they feel less competent when dealing with this complexity (CAPS Research, 2003 and Smeltzer and Ogden, 2002). One approach that specifically addresses this challenge is “performance-based contracting” (PBC). There, the buyers no longer specify the individual components of a solution (e.g., a machine and related services) but rather the desired outcome (as the value expected from the solution), whereas the suppliers’ compensation is tied to successfully achieving this outcome (Kim et al., 2007 and Ng and Nudurupati, 2010). Typical examples are fixed rates per flight hours for aircraft providers or incentive contracts for increasing availability rates of defence systems. The operational responsibility for the solution’s outcome is thus largely transferred to the provider(s). Very often, providing an integrated solution will extend beyond the capabilities of an individual provider company. To actually relieve the buyer of the operational responsibility, it is recommended that a system integrator (or solution provider) coordinates the necessary suppliers and bundles their inputs (Randall et al., 2010). For the sub-suppliers, such a system integrator might mean that they no longer have a direct link to the solution buyer (i.e., the customer) and vice versa; the system integrator thus assumes the key role in solutions provision, mostly by coordinationg the sub-suppliers and functioning as the “information hub” between them and the PBC customer (Ahlstrom and Nordin, 2006 and Hobday et al., 2005). Interestingly, while the buyer–provider relationship has received at least some attention in the evolving research on PBC, the discussion on the upstream supply chain issues is basically limited to anecdotal comments (Hypko et al., 2010a, Lewis and Roehrich, 2009 and Ng and Nudurupati, 2010). More explicitly, there appears to be a lack of dedicated research on if and how the system integrating providers of PBC involve their suppliers in the specifics of the PBC concept. This is despite the emphasis on the importance of the sub-suppliers in delivering complex solutions (Piercy, 2009 and van Mossel and van der Walk, 2008). Since communication and information exchange are critical sub-processes of the relationships to absorb the risk transfer in PBC (Datta and Roy, 2011 and Ng and Ding, 2010), an information economic perspective is used to shed light into the complexities that arise between the system integrator, the PBC customer and the sub-suppliers. This is important as complex solution bundles such as PBC usually extend beyond an individual company’s capabilities, and their providers thus strongly depend on sub-suppliers (Buse et al., 2001). The aim of this paper is to address this gap by analysing the challenges that PBC providers are facing when involving sub-suppliers into PBC with a view on the concept’s specifics, by providing insight into the current sub-supplier involvement approach of PBC providers and to analyse the implications of PBC on the provider–sub-supplier relationships. With the provider–supplier relationship as the core analytical unit in service solution provision and procurement, the remainder of this paper is organised as follows: in the next section, the literature on service procurement, product–service systems and supplier relationships will be reviewed (Section 2). The specificities of PBC are then framed from an information economic perspective and the research questions are developed (Section 3). Preceded by a methodological discussion, Section 4 will contain case-based findings on the sub-supplier relationships of the PBC providers. These findings will be discussed in Section 5 and used to develop a PBC relationship governance model using relational contracting theory as the framework. The paper is concluded with a summary, including managerial as well as the theoretical implications.

This paper intended to provide a first insight into the implications of “performance-based contracting” on the upstream supply chain, specifically, insight into the relationships between the system integrating providers and their sub-suppliers. To allow this insight, PBC was placed into a conceptual framework as part of a literature review. It was shown that PBC is seen as a concept to offer outcome-based services that are compensated based on the provider’s performance but also as a way to procure product–service systems (or complex solutions). Taking the perspective of a provider that forms a PBC customer offering, an information economics perspective on its relationship to its sub-suppliers was developed. It has been found that due to the intangibility and the freedom in choosing how to deliver the outcome in PBC, uncertainty is relatively high at the buyer (provider) side, assuming a high information advantage for the sub-supplier. Yet, uncertainty is also high for the sub-suppliers because they have no direct communication link to the PBC customer. Subsequently, interest alignment, e.g., the building of a cooperative relationship, was proposed to successfully integrate the sub-suppliers into the PBC offerings. The empirical insights from cases on how the PBC providers currently manage their sub-supplier relationships showed that in contrary to the theoretical discussion, the PBC providers currently refrain from directly involving their sub-suppliers in the PBC offering. Although the suppliers claim to manage their suppliers on a cooperative basis, the sub-suppliers risk aversion is mentioned as the key reason for why they “disconnect” their sub-suppliers from the PBC offering and conclude “traditional” supply agreements. However, the discussion of the results added some doubt on this view, emphasising the role of the providers as “information hubs” and that current information transfer to sub-suppliers is still rather low, leading to high uncertainty at the supplier side. With the non-involvement of sub-suppliers into PBC specifics, it was found that current PBC provider–sub–supplier–relationships are not fully cooperative, mainly due to the lack of interest alignment. Concerning the specifics of the supplier relationship management practices in PBC some tools were identified from the case studies that could be used to better integrate the sub-suppliers into PBC agreements, e.g., life-cycle-oriented procurement. Yet, it was argued that to reap the full benefits of PBC, involving at least the major sub-suppliers is essential, and the even less important sub-suppliers should at least be bound in long-term relationships. The governance portfolio model introduced showed that none of the cases analysed currently fully uses this approach. The paper thus provides the first dedicated research into the upstream implications of PBC both as a procurement strategy and a service marketing concept, with a focus on the provider–sub–supplier relationship. By doing so, the paper contributed to the evolving field of PBC research and also to the field of solution procurement and supplier management. The information economics perspective allows an important theoretical perspective of the uncertainties that result from PBC—both for the providers and the sub-suppliers. The case studies provided a more detailed insight into the complexities of PBC as they exist in practice. Yet, case study research is limited in the sense that the findings cannot be generalised, even more because PBC is frequently described as providing highly specific, heterogeneous solutions. Further empirical research is therefore recommended to extend the foundations established in this paper. Also, since PBC is a complex construct, further theoretical analysis is appropriate. This analysis could, e.g., be conducted with a closer view on social exchange as part of the PBC relationships or a perspective from transaction economics for determining the degree of integration or risk-focused theories that facilitate the risk transfer within PBC agreements. Also, while the dyadic perspective used in this paper was justified to reduce the complexity of the initial analysis, a triadic or network perspective that adds the PBC buyer/customer to the picture could provide important aspects for a further understanding of PBC’s challenges. It is recommended that supply managers involved in PBC make efforts to establish a climate of trust, mutuality and communication with their sub-suppliers. This could be achieved by involving the key suppliers early in the development of the PBC solutions, by establishing joint communication channels to the customer to maintain at least some information link and, last but not least, by actively demonstrating a willingness to have suppliers participate in the potential benefits of PBC, such as increased profits over a longer term.