A conceptualization and empirical investigation of strategic sourcing approaches for engineer-to-order manufacturers

Since supplier capabilities often are essential for the success of a new product, previous studies suggest manufacturers to integrate strategic sourcing into the early stages of their new product development (NPD) processes. However, the literature on this topic offers only limited guidance for manufacturers in the engineer-to-order (ETO) context, where late strategic sourcing can be inevitable due to, for example, uncertainty or changing customer requirements. To address this gap in the literature, this article first draws on the literature to conceptualize five distinct strategic sourcing approaches that ETO manufacturers can employ. The approaches differ in terms of the timing of three strategic sourcing activities during the NPD process: make-or-buy analysis, supplier selection and supplier collaboration. To investigate the approaches, we conducted an embedded single case study involving a large turbine manufacturer. The study supports the existence of all the strategic sourcing approaches and identifies distinct conditions associated with each of them. Thereby, this article extends the literature with additional clarity about strategic sourcing in the ETO context, as well as when different approaches occur.