Supply market intelligence: understanding drivers and practices

Capability to develop and sustain superior knowledge about key supply market characteristics, or supply market intelligence (SMI), forms a basis for strategic sourcing. We propose a classification framework for SMI orientations, defined along the dimensions of perpetuation and scope of SMI activities. The insights from a focus group discussion with 35 PSM professionals suggests that the framework appears to be able to cover comprehensively the various orientations; however, companies are limited in terms of the nature of their SMI activities. The extent of coverage appears to be driven by purchasing importance and uncertainty. The results also shed light on the microfoundations of SMI capability.