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  • Businesses increasingly look to suppliers as a source of value-add but global wage trends mean the benefits of low-cost country sourcing are eroding

  • New BearingPoint Sourcing Monitor research indicates procurement departments are increasing in influence and prominence in business strategy, as the importance of supplier networks gain recognition

  • Growing interdependency means businesses’ and suppliers’ success is closely intertwined

  • An early warning system can be implemented to identify the early stages of supplier issues before they turn to crisis and take necessary steps to solve the problem

As many organisations adopt increasingly integrated partnerships with suppliers, managing sustainable relationships and spotting early warning signs of problems becomes critical. In times of crisis, there comes a point when the cost of abandonment is greater than supporting and reviving a relationship.

The low-hanging fruit have been plucked

It would have been difficult for any organisation not to get caught up in the excitement generated ten years ago by globalisation and access to lower-cost markets. Over a relatively short period, India and China became the services and manufacturing engine rooms of the world (note 1) (note 2), resulting in a product and service boom that continues to have impact.

At the heart of the changing global market landscape lay a simple equation: using lower-cost suppliers led to increased competitiveness and higher margins. Western companies were quick to exploit these new sources of potential savings, harvesting the low-hanging fruits of the global sourcing economy to create a new market dynamic. As shown in our lead infographic, exports from lower-cost countries have soared in the period 2000–12 (note 3), illustrating just how rapidly this impact has been felt.

Fast forward to today, however, and we see the knock-on effects of such moves. Companies have become increasingly reliant on their suppliers. In Swedish industrial organisations, for example, 35% of ‘share of value generation’ was developed internally 20 years ago: that is, 35% of value was created by people within the business. Today, this figure is closer to 20% (note 4).

In parallel, emerging economies are no longer the low-cost sources they once were. As stated by the Organisation for Economic Co-operation and Development (OECD), ‘Global growth forecasts have been revised down significantly… To a large degree, this is related to demographic trends and the diminishing scope for catch-up growth as the income gap with the advanced countries narrows' (note 5).

There is no longer an excess global supply, which means that you can no longer jump around from one supplier to another but rather you need to get much closer involved with your suppliers. Especially since the financial crisis, a lot of the excess capacity has disappeared – entrepreneurs are not popping up at the same pace as before and attracting capital for industrial investments has become much more difficult as well.

BUSINESS DEVELOPMENT EXECUTIVE, GLOBAL CONSUMER GOODS COMPANY

Most significantly, as highlighted in the 2014 BearingPoint Sourcing Monitor, the power base is moving from companies to an increasingly mature supplier network (note 6). Interviews carried out for this research illustrate how customer organisations are becoming increasingly dependent on their suppliers because, for example:

  • Purchasers are looking for suppliers with whom they can co-develop new products or services, moving the centre of gravity for innovation to the network
  • Growing numbers of companies are choosing purchasing strategies that involve buying complete products, rather than manufacturing them themselves
  • The costs of finding and developing new suppliers takes time, as does the cost of moving away from existing suppliers, particularly if shared infrastructure, technology or standards are involved
  • There is a diminishing pool of low-cost countries from which to source, when rising wages in countries with an appropriate Human Development Index score is taken into consideration (note 7)

Suppliers are still often selected on cost effectiveness for a short- or mid-term contract yet they can drive up both costs and delays with knock-on effects on an organisation’s endcustomers

Given that Western companies cannot go back to pre-millennium relationship models, the overall effect is increased exposure to risk, as the business success of customer organisations has become inextricably linked to the performance of the supplier base. As BearingPoint Sourcing Monitor respondents note, a poorly performing supplier can drive both costs and delays, with knock-on effects felt by an organisation’s own customers.

Meanwhile, however, many suppliers are still selected on cost-effectiveness criteria, which are kept for the duration of the supply contract. For example, according to the 2014 BearingPoint Sourcing Monitor, cost management is reported as the highest priority for purchasing managers, according to 71% of respondents (note 8).

Our experience of working with clients tells us that customer organisations are coming to recognise they cannot base supplier management on cost control alone. As Charles Hampden-Turner and Fons Trompenaars discuss in their book Capitalism with a conscience: how we can create wealth... not destroy it, pushing for low prices may appear to have a positive impact in the shorter term, but can do longer-term damage to the supplier, and therefore the customer, if the supplier is unable to develop and grow (note 9).

In cases where suppliers start to run into difficulties, the overall effect creates a fundamental dilemma. The organisations we work with tell us that the cost of abandonment is significantly greater than it used to be – this is often due to past supplier consolidation exercises, which have led to a greater level of dependency and therefore cost of extraction from potentially troubled relationships. At the same time, however, the costs of providing further support to at-risk suppliers, or indeed considering more sophisticated partnerships with them, have also increased.

Resolving this dilemma is not simple, not least given that perceived problems could be symptoms of deeper issues, which may require longer-term (and even more costly) actions. However, we can identify the main cause as an inability to see, then understand the ‘bigger picture’ of supplier health and how it relates to the customer organisation’s own business.

Scenarios such as these are common:

The all-too-obliging supplier
A supplier’s business was built on advance, batch production, with orders shipped directly from stock. Historically this did not cause problems for the customer, thanks to astute planning from the supplier. When a big campaign exceeded its initial forecast and the supplier was unable to fulfil demand, relationships between supplier and customer soured. Both sides started to hoard advance stock: the customer did not want to order more until the issues were resolved. This put additional pressure on margins, causing pricing issues. While the supplier clearly needed help with business and capacity planning, the underlying issue – a mismatch between customer-order behaviour and the supplier’s operating model – was exacerbated by a lack of communication. All of a sudden a high-performing supplier was seen as clearly under-performing.

The blood-sucking customer
For many years, a supplier had only one major customer. Throughout the journey the supplier had been highly competitive – more than any other – but this aspect was not recognised by the customer, who threatened that the supplier could lose their position unless they cut their prices further. After 10 years of operation and as the business was about to implode after years of starvation, the supplier concluded that their accumulated profit for the entire period was close to none. When they reached out to their customer for support, the customer felt the problems were all on the supplier side. It took external analysis (much of which was funded by the customer) to identify the actual causes, and then define and support turnaround activities.

The unsustainable growth supplier
For seven years, another business had been growing at more than 25% CAGR and had become a critical OEM supplier to their customers. However, their operating model was about to break down: rapid growth had financially undermined the company, which had maximised every source of funding and had no cash to pay its own suppliers. Meanwhile the founder-owner was causing internal conflicts, as he became increasingly nervous about losing everything. In consequence, the customer introduced a dedicated team to stabilise the situation and then turn the supplier’s business around. Post-analysis research revealed that the customer had almost all the information they needed to indicate significant risk building up with the supplier.

The over-ambitious investment
After years of supplying goods at competitive prices with solid delivery performance, a high-performing supplier decided to invest in a new manufacturing site for the development of a number of new product lines. The investment – by far the largest they had ever made – was supported by some of their main customers who provided bank guarantees. Warning signs started to show as the investment budget was exceeded several times. Problems continued as the newly commissioned site struggled to deliver on capacity and price, impacting the bank guarantees. Meanwhile, their main customer had discontinued other suppliers and started to offer the new products in their catalogues, at new and significantly reduced prices. This presented a commercial risk, as the products (expected to be high in demand) were not to be available as planned. In the end, the supplier’s biggest customer undertook independent audits and instigated a turnaround initiative to get the supplier back on track.

How purchasing departments can shape the supplier networks of the future

Supply chains are moving from cost competition to value networks
In the eighth edition of BearingPoint’s Sourcing Monitor, we look at how the changing global supplier ecosystem is driving corporate behaviour. Once seen as sources of lower-cost goods, supply chains are maturing into powerful, complex networks of product and service provision. Supplier relationships are changing as business value continues to shift towards the network.

Organisations are developing closer relationships with suppliers
Given that finances are still tight for many organisations, it is hardly surprising that cost cutting remains the main factor for transforming the supply network.

  • 54% of interviewees reported cost cutting to be the number one factor for transforming supply networks, making it the primary reason However, respondents also reported how they are looking to build closer ties with their suppliers.
  • 65% of interviewees indicated that supply network transformation is part of company strategy

Innovation and ‘know-how’ are driving the trend towards diversified suppliers
In both established and emerging markets, a number of interesting and innovative ways of ‘helping’ suppliers are evolving. These methods range from establishing standards and stabilising operational bases, to direct intervention through the provision of information, advice and even capital. One European automotive company is partnering with local authorities in India to create a manufacturing partner from scratch. The result is a win–win for all parties: the company benefits from local financial and administrative help, whilst the community gains employment and skills development in a poor and rural area. In such examples the rewards are great, but so are the risks. Only with a long-term view on supplier management can strategic decisions become viable, taking into account upstream and downstream logistics, labour costs and incentives.

Purchasing departments are gaining influence on the long-term vision of organisations
The potential for major gains means there is increasing influence for purchasing departments within businesses. These departments have an unprecedented opportunity to shape the evolution of the company through the suppliers on which it depends. Indeed, 67% of interviewees said network transformation was placed under the purchasing department’s wing. As a result, the department is becoming recognised as an important source of added value to the company. This can manifest itself in different ways. For example, we are seeing heads of product management and purchasing making joint decisions on product roadmaps and industrial strategies, based on what external suppliers can bring to the table. Purchasing managers’ influence is broadening into offering insights on the new competitive landscape and developing business metrics that go beyond cost management. But even if purchasing departments step up to the plate, are their companies really ready, in terms of resources and skills, to transition to smarter use of the evolving supplier network? Whilst some organisations are readying themselves for the future, others risk being left behind. These, and other conclusions will be revealed in the Sourcing Monitor report, to be published in June 2014. Find out more here: http:// inst.be/004PM

Methodology: The project team conducted 500 interviews with purchasing directors by telephone with purchasing directors between September 1, 2013 and February 17, 2014

Project team: Livia Gonzalez and Julie Micolle

There are very few incentives for procurement representatives to ensure the long-term stability of suppliers; low prices are what is rewarded. Few buyers look into the performance of the supplier, as long as the price is good.

SOURCING MONITOR INTERVIEWEE

Customer organisations lack visibility on the supplier ‘crisis cycle’

In our experience, the reasons why traditional supplier development and management approaches are insufficient boil down to factors on both customer and supplier side:

  • A lack of availability and quality of information about individual suppliers. Often, neither supplier nor customers want to reveal their hands, for fear this might compromise the integrity of their businesses.
  • An incomplete view of what constitutes ‘healthy’ supplier profitability. For purchasers and category managers, the idea of a supplier achieving a healthy profit is neither what they are used to, nor how they are incentivised.
  • Procurement departments are not typically organised or staffed in a way that enables the broader view of a supplier to be taken into account

These factors are exacerbated by some elements of procurement processes and practices, not least how purchasing teams are rewarded for their efforts. One BearingPoint Sourcing Monitor interviewee explains, ‘There are very few incentives for procurement representatives to ensure the long-term stability of suppliers; low prices are what is rewarded. Few buyers look into the performance of the supplier, as long as the price is good.’

The overall effect is a lack of visibility and impetus when it comes to identifying and responding to supplier issues – customer organisations do not know when suppliers are running into trouble, nor do they necessarily feel the responsibility to act. These weaknesses were not so great an issue in times of plenty – after all, if suppliers were no longer performing, plenty of others could step in to take their place. This was the nature of early supplier risk-management approaches – in general, the attitude was, ‘If in doubt, throw them out.’

As the supplier ecosystem has matured and organisations have become increasingly dependent on their suppliers, however, the overall effect is increased potential exposure to risk (note 10). In this context the absence of information is resulting in problems not being identified quickly enough, increasing the levels of risk to which a customer organisation is exposed. Through the downturn, for example, in our client projects we saw an increasing number of situations where suppliers reached a crisis point, which was predictable in hindsight but was not spotted in time to take preventative action.

The stages that organisations go through in this ‘crisis cycle’ are increasingly well understood, as are the resolution approaches that can be adopted. Consider, for example, the supplier that sets itself on a course to insolvency by adopting a poorly considered business strategy aimed at reducing a shortfall in profitability. Any potential issues could already be resolved through some realignment of strategy, but they can be difficult to grasp at this early stage.

If the supplier continues to suffer profitability issues, the result is an earnings crisis, which in turn can result in a liquidity crisis – that is, cash-flow difficulties. Warning signs of a freefall in performance can be:

  • Increasingly reactive behaviour, focusing on ‘quick fixes’ rather than treating root causes
  • A loss of competitive positioning compared to other suppliers
  • Price increase requests being made by suppliers to customer organisations
  • Increasing debt levels, initially as longer-term and later as shorter-term credits
  • Traditional supplier development actions resulting in only marginal improvements

Even as the supplier adopts more draconian steps to turn itself around, when shifting from an earnings crisis to a liquidity crisis, it is possible that the issues could still go unnoticed by customers – who might lack the experience or capabilities to do anything about the situation. If the measures are unsuccessful, the final stage might be insolvency. Clearly, if this is the first time a customer hears of any difficulties, it may well be too late to take remedial action.

Needless to say, it does not have to be this way. This common scenario, taking place over a number of years, presents a number of symptoms before arriving at its cataclysmic conclusion, the data for which is freely available or frequently accessible from company annual reports, existing supplier scorecards or broader country or market data. Might supplier disaster scenarios be avoided if the right data is at hand, and the customer has the tools and competences to do something about these situations?

Relating performance risks to available indicators

Having reviewed the case studies of many supplier crisis situations on which we have worked over the years, we found symptoms of four challenges among companies in distress, relating to growth, profitability, liquidity or debt ratio. These most common types of challenge relate directly to specific and measurable indicators, as shown in figure 2.

The early warning challenge is not to find the information (which is often freely identifiable), but to collate it in one place and know how to connect the dots. As well as corporate financial information, data can be drawn from a number of sources and perspectives – customer delivery performance, product quality, exchange rate impacts, changes in credit rating, frequent management team changes and other factors, to give an overall picture of the supplier situation and what risks might exist.

The early warning challenge is not to find the information but to collate it in one place and know how to connect the dots

Usually there is no single factor that indicates a potential performance freefall. By collating the right kinds of information that are most applicable to a customer organisation’s business models and needs, we can create an early warning system, which enables emerging critical situations to be identified before they turn into corporate crises.

Clear benefits exist in gathering consistent and timely data for an organisation’s most critical suppliers, enabling the identification of systemic issues that cannot be identified by looking at one or two key performance indicators (KPIs) alone. In addition, supplier early warning systems can be used to shine a spotlight on issues with suppliers that appear to be working well, on the outside at least. Such tools can also be used for positive benefit, for example enabling ‘what-if’ scenario analyses, feeding direct efforts to collaborate with suppliers when launching a new product line, during expansion planning, or managing other major changes.

From early warning to supplier turnaround

As many organisations are aware, it is not always straightforward to move away from suppliers, particularly when a large investment has already been made or a high level of co-dependency exists. The cost of switching may well be substantial, making sticking with a supplier in trouble a more cost-effective option. Of course, an even better option is to deal with challenges before they start having a major impact. It is therefore important to adopt a proactive approach that can identify, diagnose and resolve root causes and support suppliers through their difficulties – a process we call ‘supplier turnaround’.

In our experience, supplier turnaround becomes particularly applicable when:

  • A large, systemic performance gap exists across the entire supplier business, rather than being isolated to single functions
  • Supplier maturity is already high, so simple, lower-cost ‘quick fixes’ to the supplier are less applicable

For non-critical suppliers, the cost of abandonment is usually much lower than that of developing a more strategic, sophisticated relationship

Not all suppliers are equal – they will vary in terms of their maturity, relative size and the critical nature of the products they supply to customers, as well as factors such as ease of interaction, sustainability record and brand association. In our experience, for example, manufacturers more geared around human-intense processes tend to find change easier than those heavily reliant on productspecific automation – it is easier to retrain people than to replace an automated production line.

Factors such as these can dictate when to abandon a supplier and have a fresh start, or when to support a supplier and develop a more advanced level of partnership. For non-critical suppliers, where other options exist in the market, the cost of abandonment is usually much lower than that of developing a more strategic, sophisticated relationship. As supplier standing and dependency increases however, a critical point exists where the cost of abandonment becomes prohibitive (figure 3). Indeed, the most common reason that we see for customers supporting their suppliers through a turnaround situation is that the supplier is critical to the customer and cannot be replaced without very high costs.

Where a supplier is troubled financially we agree a way forward in terms of reviewing their financial health and special measures, including ongoing review of accounts and restricting level of business given to supplier etc., as well as looking at an exit to an alternative supplier as a contingency.

MATT CRANNY, OPERATIONS AND SERVICE DIRECTOR, LEASEPLAN UK

Faced with a decision to ‘support and sophisticate’ a failing supplier, how should this be enacted? Turnaround measures will, inevitably, depend on the nature and relationship of the supplier to the business. First, therefore, the customer organisation needs to assess what is going wrong, taking a role akin to an external advisor with a systemic view, understanding suppliers’ individual needs and what they bring to the table, and placing risks and issues in context. In some cases, organisations may choose to assign an appropriately skilled team to a turnaround, using internal or external resources – a third party may be better placed to identify both supplier-side and customer-side issues, and can act independently in case of conflict.

As supplier standing and dependency increases, a critical point exists where the cost of abandonment becomes prohibitive.

Following identification of root causes, it becomes possible to define appropriate actions. In our experience, a wide variety of potential measures can be enacted across a period of 1–2 years:

  • Short-term recovery actions to stabilise the business, targeting operational performance, establishing management controls and creating the necessary conditions to perform
  • Medium-term operational and tactical actions, including coaching and refining of improvements that improve an organisation’s cash position and enable growth
  • Longer-term strategic actions targeted at improving business whilst maintaining a sound level of profitability 

In a recent turnaround situation, we secured a competitive supply source, made double-digit percentage quality improvement, as well as seeing a major improvement in the supplier’s own profitability and cash flow – the supplier became cash positive for the first time in four years.

BUSINESS DEVELOPMENT EXECUTIVE, GLOBAL CONSUMER GOODS COMPANY

A key tenet is to ensure root causes are solved once and for all, otherwise the implementation of measures is a false economy as challenges reappear further down the road. It may be worth supporting a supplier financially if its products can be sold at a higher margin, if the supplier has cheaper longer-term support costs, or simply to help them deal with a temporary cash-flow situation. However supplier turnaround is clearly about more than injecting cash or writing off debt.

It may well be that some root causes lie with the customer – as we have discussed, for example, the procurement department may have been squeezing too hard on prices in the first place. A turnaround may well result in changes to a customer’s way of working with the supplier at risk, as well as other suppliers.

A turnaround may well result in changes to a customer’s way of working with the supplier at risk, as well as other suppliers

Bottom line: if your suppliers fail, so might you

The nature of supply has changed, and it has changed for ever. While some organisations are still looking for lower-cost sources, there is no longer an excess of global supply – any remaining low-cost sources, too, will mature and differentiate themselves on added value and service criteria over time. Equally, today’s organisations have become more dependent on their suppliers than in the past. Whereas purchasing functions in many organisations still act as though casting aside underperforming suppliers is a logical option, switching to new sources is increasingly costly and time-consuming.

The dynamic nature of supplier networks, and the fact that procurement is still focused more in practice on cost-oriented criteria than on strategic partnerships (despite ambitions to adopt longer-term approaches), can make it difficult to spot the onset of supplier issues. However, shouldn’t organisations avoid getting into such positions in the first place? To do so requires a new set of competencies – not only purchasing and management at a contract and product level, but finance, production, general management and even understanding consumer behaviour. This also requires incentive structures aligned with delivering on partnership goals as well as value for money.

From the supplier side as well, it is becoming more difficult to grow and change. Certain regions suffer from shortages of material and labour; meanwhile, as customer demands increase (in terms of both policies and infrastructure), it is increasingly time-consuming to evolve existing relationships and develop new customers. As a result, fewer new suppliers are appearing, meaning that customer organisations are drawing on an increasingly constrained and inflexible pool.

65%

The percentage of BearingPoint Sourcing Monitor respondents who indicated supplier network transformation is part of their customer strategy (note 11) 

The good news is that approaches exist to support deepening relationships with suppliers, which can be deployed when the weather is fair for protection against potential storms. Supplier early warning is not difficult in itself; the hard part is for the organisation to be both able and willing to do something with the information it presents. Based on our experience of working with a variety of clients in supplier turnaround situations, we would advise customer organisations to:

  • Improve early warning identification capabilities. Build an understanding of what drives performance among your suppliers and what capabilities you already have, to gain a holistic view and identify underlying issues. The resulting, tailored early warning system can be owned by procurement, but should be used more broadly across business functions: for example, for quarterly evaluation of critical suppliers.
  • Identify the malaise at the heart of your business and do something about it. Be proactive in identifying key suppliers that are underperforming, rather than waiting until you are forced to take drastic action. Adopt a partner approach with your suppliers and be prepared to invest both time and money in resolving root causes.
  • Change organisational behaviours from tactical and financial to be driven by strategy and relationships. What behaviours do you reward today, both within procurement and across the organisation? Ensure that you reward those responsible for supplier development, not only for cost reduction (which remains critical) but also for making your suppliers true stakeholders in your business in the long term.

Organisations are arriving at a fork in the road in terms of how they treat key suppliers, which are increasingly fundamental to their customers’ businesses. Suppliers should be managed as an integrated part of the business – if you treat them well, their willingness to share information will increase, making it easier to spot problems in time, or even prevent them from appearing. If not, however, by the time problems occur, the damage may already be too great to be resolved.

Key Takeaways

  • The outsourcing drive of recent years means that the pool of suppliers has shrunk. Organisations are more dependent than ever on their suppliers, as they create more of the value at the same time as consolidating their position. The cost of changing suppliers is therefore also high.
  • Some suppliers are ticking time-bombs, operating at very low levels of profitability. The risks to organisations are mainly financial/operational (for example stock-outs leading to revenue loss, costs of shifting suppliers, reputation risks with customers), but also encompass governance and other risks.
  • Industrial companies need better ways of working with their suppliers, as the current relationship model risks undermining their own busineses. They need to be able to act early enough to invest directly into suppliers before it is too late to avoid crises.
  • Lines of business need tools to assess the state of suppliers directly, rather than (as currently) relying on procurement and ‘old school’ supplier portfolio management approaches.
  • It is possible to create an early warning system that assesses long-term supplier risk based on a number of straightforward variables.
  • Companies should be prepared to take a much bigger financial stake in some of their suppliers to help resolve critical situations.
  • The key is for companies to treat every supplier as an integrated part of their own businesses – especially when a supplier is in trouble. This breaks with past attitudes that focused mainly on pushing for cost reductions.
  • Notes and bibliography
    1. World | Letter from India | How India became an outsourcing magnet', New York Times, New York, USA, web, Manu Joseph, 28/03/12, http://nyti.ms/O3G2SH
    2. 'China noses ahead as top goods producer', Financial Times, London, UK, web, Peter Marsh, 13/04/11, http://on.ft.com/1h2dW1f
    3. 'IMF data | IMF Data Mapper ® | IMF International Financial Statistics (IFS)', IMF, International Monetary Fund, Washington, DC, USA, web, first published 2011, http://bit.ly/PbmHQo
    4. 'Report on profitability and performance measures for Swedish industrial companies 2012', Association of Swedish Industrial Companies, Stockholm, Sweden, PDF, Anders Rune and Bengt Lindqvist, 2012, http://bit.ly/1g6zny0. This report is in Swedish.
    5. 'OECD economic outlook', Organisation of Economic Co-operation and Development, Volume 2013, Issue 2, Paris, France, PDF, OECD, 19/11/13 http://bit.ly/1l9Hgbm
    6. 'BearingPoint Sourcing Monitor', Paris, France, Matthias Loebich and Jerome Courgeon, BearingPoint, Paris, France, to be published June 2014. For more information, visit http://inst.be/004PM
    7. 'The rise of the south: human development in a diverse world', Human Development Report 2013, New York, USA, PDF, United Nations Development Programme, 2013, http://bit.ly/1gxeHEl
    8. BearingPoint Sourcing Monitor, Paris, France, Matthias Loebich and Jerome Courgeon, BearingPoint, Paris, France, to be published June 2014. For more information, visit http://inst.be/004PM
    9. Capitalism with a conscience: how we can create wealth… not destroy it, Charles Hampden-Turner and Fons Trompenaars, Elliot & Thompson, London, UK, 15/05/14, http://amzn.to/1gSTKol
    10. BearingPoint Sourcing Monitor, Paris, France, Matthias Loebich and Jerome Courgeon, BearingPoint, Paris, France, to be published June 2014. For more information, visit http://inst.be/004PM
    11. BearingPoint Sourcing Monitor, Paris, France, Matthias Loebich and Jerome Courgeon, BearingPoint, Paris, France, to be published June 2014. For more information, visit http://inst.be/004PM
    • ‘OECD economic outlook’, Organisation of Economic Co-operation and Development, Volume 2013, Issue 2, Paris, France, PDF, OECD, 19/11/13 http://bit.ly/1l9Hgbm
    • ‘IMF data | IMF Data Mapper ® | IMF International Financial Statistics (IFS)’, IMF, International Monetary Fund, Washington, DC, USA, web, first published 2011, http://bit.ly/PbmHQo
    • ‘Research | Global reports | Global wage report 2012–13’, International Labour Organization, web, Conditions of Work and Employment Branch (TRAVAIL), 07/12/12, http://bit.ly/1mak3FD
    • ‘Report on profitability and performance measures for Swedish industrial companies 2012’, Association of Swedish Industrial Companies, Stockholm, Sweden, PDF, Anders Rune and Bengt Lindqvist, 2012, http://bit.ly/1g6zny0. This report is in Swedish.
    • ‘Press release | IAOP releases annual outsourcing trends to watch in 2013’, International Association of Outsourcing Professionals, Poughkeepsie, NY, USA, web, Kate Tulloch-Hammond, 05/11/13, http://bit.ly/1g6IKxD
  • Project team

    Sebastian Håkansson, Jonas Aronsson

  • Acknowledgements

    The authors would also like to thank James Rodger, Joerg Eschmann and Christian Feldmann from BearingPoint, who have contributed with their subject matter expertise; Ludovic Leforestier and Thomas Clarke from the BearingPoint Institute for their great support, creative ideas and review; and Jon Collins from Inter Orbis and Michael Agar from Michael Agar Design. The authors are extremely grateful to all the executives across Europe who shared their insight with us for this research.

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