Supply supplier integration, procurement, and outsourcing: case study of SCM social capital benefits

Supplier selection and integration are important decisions faced by management, as supply chain management (SCM) and inventory management are both integral to efficient operations and the ability to compete in the global marketplace. The nature of supplier selection forces managers to choose between conflicting criteria, such as quality and cost, in order to evaluate the decision. As such, this problem can become increasingly complex as multiple criteria and multiple suppliers become involved. Using a case‐study method, as on stakeholder theory, the present study explored the importance of SCM and review how Heinz has worked with Ariba to further enhance its capability to approach this important operations management topic. It was found that through collaborative relationships between the two Pittsburgh‐based firms, they were able to share risks, access complementary resources, reduce transaction costs, and enhance productivity.