supply network strategies: lars erik gadde and håkan håkansson (eds.); supply network strategies,...

Journal of Purchasing & Supply Management 10 (2004) 103–104

ARTICLE IN PRESS

doi:10.1016/j.pu

Book review

Supply network strategies

Lars Erik Gadde and H(akan H(akansson (Eds.); SupplyNetwork Strategies, Wiley, Chichester, West Sussex,UK, 2001, 206pp, price d25.99, ISBN 047149916

The Industrial Marketing and Purchasing (IMP)Group was established in 1976 by researchers from fiveEuropean countries. In addition to producing manybooks over the years, the group run a highly successfulannual international conference. What makes a book bytwo leading figures of the IMP of great interest is thatthe group has, over time, developed a distinct andEuropean view of supply. (There is an argument thatIMP work has been more influential in North Americathan is often acknowledged.) There is also a little rivalryand more importantly much cross fertilisation betweenthe annual IPSERA and IMP conferences, although ingeneral I would suggest the IMP is far more gearedtoward marketing perspectives than supply. However tobe fair the book reviewed here is firmly targeted at thosein purchasing.What makes the work the IMP produce on purchas-

ing especially intriguing is that a somewhat crude butvalid distinction can be made between two schools ofpurchasing study. Broadly the split would be betweenthose who see purchasing as rooted in operationsmanagement, and those such as the IMP who seepurchasing as derived from marketing. (It is tempting tosay that those with a logistics bent can swing bothways.) To date a broad generalisation would be thatmany would see the IMP approach as contributing themost to theory, while the operations ‘school’ is better atcontributing to practice.A perception of a lack of relevance to practice has

been a common criticism levelled at IMP work; that itdoes not offer managerial strategies, that is, tools andtechniques that can be used in ‘the real world’. Thereforethis book, which promises ‘‘to launch a framework forsupply strategies’’ potentially offers approaches thatmanagers can implement.The early chapters set out an analysis of the dynamics

and challenges of purchasing, increasingly setting thecontext of supply as the networked economy. Whatemerges is that companies must be viewed from anumber of perspectives (in line with a network view),not just as a production unit, but as a knowledge unit, acommunication unit and as a capital earning unit. Later

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the authors focus heavily on the firm from a knowledgeperspective, viewing the firm ‘as the representative of thetotal knowledge that can be activated’ which is wherestrategies for supply relationships are of critical im-portance.The second part of the book introduces a network

perspective identifying three critical layers in networkanalysis—activities, resources and actors. A chapter isdevoted to each, and these chapters provide theanalytical tools for subsequent network analysis. Thefinal third of the book is where supply strategies areintroduced and where this review focuses. First a ‘makeor buy’ chapter (framed in IMP network analysis)discusses the boundaries of the firm. This is followed bya chapter on how different types of relationships impacton the costs and benefits of supplier relationships. Thefinal two chapters examine the total supply base of acompany before concluding with an analysis of purcha-sing’s role in ‘networking’ (that is managing within, butnot attempting to manage, networks).Given that the book is by two of the leading lights of

the group, much of the first two parts will be fairlyfamiliar to those already acquainted with the IMPapproach. For anyone not familiar with the IMPapproach, their emphasis on relationships and networkscan produce innovative and fresh takes on familiarissues. What is new is the promised emphasis on tangiblestrategies for supply management—or as these authorswould phrase it, managing within supply networks. Theexamples and cases used are suitably international, fromIKEA to IBM. In line with a network view the authorsare not afraid to test the reader with diagrams of supplynetworks that insist on portraying the complexity andinterconnected nature of supply relationships ratherthan simplistic and linear ‘supply chains’. (The authorsgo on to make a strong case that purchasing hasoveremphasised efficiency in supply chains, which theirnetwork approach sees as only the activity element ofnetworks, and therefore a partial and high riskapproach.)For those unfamiliar with the IMP this is a modern

and concise presentation of the main tenets. Howeverthe test for this reviewer is what practical help canmanagers involved in supply receive from the text.Chapter 7 is an articulate and fresh discussion of themake or buy decision, encapsulated in how to determinethe boundaries of the firm. The authors make gooduse of academic sources, but also use heavy weight

ARTICLE IN PRESSBook review / Journal of Purchasing & Supply Management 10 (2004) 103–104104

contributions from real companies to support their casethat the fashion for outsourcing needs to be treated withcare.Chapter 8 analyses the implications of the different

types of relationship strategies that can be used by acompany. Based on an in-depth understanding ofpractical purchasing issues the chapter is outstanding.The authors build their case, that there is a tendency toportray arm’s length relationships as conflictual, andpartnerships as friendly and co-operative, and yet whatis needed is a portfolio of relationships, very soundlyand with sophistication. The stereotype often attributedto IMP authors is of taking a rather Scandinavian/egalitarian view of supply relationships as all long termand high involvement. But Gadde and H(akansson donothing of the sort, theirs is a ‘mix and match’ approachbased upon constant relationship monitoring, they arein favour of low involvement relationships—even withsignificant customers or suppliers—when they areappropriate. Where the chapter excels is that it goesbeyond analysis to give practical guidance on howmanagers can approach these decisions.Chapter 9 discusses designing supply networks, as in

how to put together the appropriate combination ofdifferent relationship types. Nike’s supplier network isused as a case study (if one wanted to be picky, as withsome of the early case vignettes, the material is a littledated) but it does illustrate their argument—the need fora mixture of relationships with different levels ofinvolvement. The chapter ends with a whole section of

managerial tasks ‘management is about active strategiz-ing’ that they claim can be used by any managerregardless of position within a network. So far so good,however the final chapter necessitates taking a furtherleap forward into IMP thinking and into using an IMPvocabulary. In closing, the authors stress the criticalneed to continually examine the boundary of the firm,that networks are fluid so it is really ‘networking’, thatstrategies are only partial and are only valid for the timebeing, and must continuously be changed and altered. Ithink the analysis is superb, but to implement it, to readthe final chapter and take something concrete from itinto work the next day I think depends heavily on thereader’s willingness to really engage with the IMPapproach.I still think this is a super book, I think anyone

working or researching in purchasing could benefitfrom reading it. There are approaches managers canuse, interwoven with judicious use of theory. It isnot a ‘seven easy steps to managing within networks’but neither is it all theory. It is easy to read andpacked full of real insights into purchasing—highlyrecommended.

Nigel CaldwellSchool of Management, CRiSPS, University of Bath,

Bath BA2 7AY, UK

E-mail address: mnsndc@management.bath.ac.uk