Managing Critical Spare Parts within a Buyer-Supplier Dyad: Buyer Preferences for Ownership and Placement

Cynthia Wallin Blair (First Author), Yuhchang Hwang (Participant Author), Manus Rungtusanatham (Participant Author), Richard Bruce Money (Participant Author), Elliot Rabinovich (Participant Author)

Research output: Contribution to journalJournal

1 Citation (Web of Science)

Abstract

Despite the criticality and expense of spare parts, many firms lack a coherent strategy for ensuring needed supply of spare parts. Moreover, scientific research regarding a comprehensive spare parts strategy is sparse in comparison with direct material. Our research identifies and tests three literature-based, theoretically anchored attributes that influence a buyer's preference for inventory ownership and inventory placement when managing the stock of a critical spare part. Our findings indicate that item specificity and item supply uncertainty are useful in predicting a buyer's preference for managing the inventory of a critical spare part. Furthermore, we find that buyers have (1) a strong preference for consignment-based inventory management approaches, (2) a bias against inventory speculation despite its use in practice and analytical models, and (3) a strong preference for inventory postponement when the level of supply uncertainty is low.
Original languageEnglish
Pages (from-to)111-128
JournalJournal of Business Logistics
Volume41
Issue number2
DOIs
Publication statusPublished - 2020

Corresponding author email

cynthia.wallin@byu.edu

Keywords

  • consignment
  • customization
  • experimental design
  • scenario-based role-playing experiment
  • spare parts
  • specificity
  • uncertainty

Indexed by

  • ABDC-A
  • Scopus
  • SSCI

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