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

Keywords

inventory management, item specificity, supply uncertainty

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 Publication Citation

Wallin Blair, C., M. Rungtusanatham, E. Rabinovich, Y. Hwang, R. Money. 2020. “Managing Critical Spare Parts within a Buyer–Supplier Dyad: Buyer Preferences for Ownership and Placement.” Journal of Business Logistics, 41(2), 111-128.

Document Type

Peer-Reviewed Article

Publication Date

2020

Publisher

Journal of Business Logistics

Language

English

College

Marriott School of Business

Department

Marketing

University Standing at Time of Publication

Associate Professor

Link to Full Text

Share

COinS