Chapter 4 Supply Management Integration for
Competitive Advantage
4.5 The Critical Role of Cross-Functional Sourcing Teams
Cross-functional sourcing teams have become increasingly important as firms pursue leading-edge
supply management strategies and practices.
Cross-functional sourcing teams: consist of personnel from different functions and,
increasingly, suppliers, brought together to achieve supply management or supply chain –
related tasks.
When executed properly, cross-functional sourcing teams can bring together the knowledge and
resources required for responding to new and challenging sourcing demands, something that rigid
organizational structures are often incapable of doing.
4.5a Benefits Sought from the Cross-Functional Team Approach
When cross-functional teams meet their performance objectives, the benefits can far outweigh the
cost of using teams. The following highlights some of the benefits that organizations hope to realize
from cross-functional sourcing teams:
- Reduced time to complete a task
- Increased innovation
- Joint ownership of decisions
- Enhanced communication among functions or organizations
- Realizing synergies by combining individuals and functions
- Better identification and resolution of problems
- The need to build internal relationships through teams
4.5b Potential Drawbacks to the Cross-Functional Team Approach
The team approach requires careful management, open exchange of information between
members, motivated team members, clearly understood team goals, effective team leaders, and
adequate resources. There are potential drawbacks to the team approach when conditions do not
support an effective team effort:
1
, - Team process loss
Process loss: occurs when a team does not complete its task in the best or most efficient
manner, or members are not motivated to employ their resources to create a successful
outcome.
- Negative effects on individual members
- Poor team decisions
Groupthink: the tendency of a rational group or team to arrive at a bad decision when other
information is available.
4.5c When to Form a Cross-Functional Team
A team approach is useful when the task at hand satisfies certain characteristics. A firm faced with a
complex or large-scale business decision should consider the cross-functional team approach. A firm
can also use the team approach when a team is likely to arrive at a better solution than a person or
department acting individually.
The cross-functional team approach is also useful when no single function has the resources to solve
a problem that affects more than one department or function.
4.5d Improving Sourcing Team Effectiveness
Question 1: Does our Organization Consider Cross-Functional Team
Planning Issues when Establishing Sourcing Teams?
Successfully using teams requires extensive planning resource commitment and top management
support before a team should be established. Several sourcing team planning issues:
- Selecting a task
Meaningful task: one that requires members to use a variety of higher-level skills, supports
giving members regular feedback about performance, results in an outcome with a
significant effect on the organization and others outside the team, and provides members
autonomy for deciding how they will do the work.
- Selecting team members and leaders
An effective team member is one who meets the following requirements:
o Understands the team’s task – the member has task-relevant knowledge
o Has the time to commit to the team
o Has the ability to work with others in a group
o Can assume an organizational rather than strict functional perspective
- Training requirements
- Resource support
Question 2: Does Executive Management Practice Subtle Control over
Sourcing Teams?
Subtle control involves activities undertaken by management to increase the probability of team
success. There are several ways that management can practice subtle control over sourcing teams:
- Authorizing the creation of the sourcing team
- Selecting the team’s task
- Establishing broad objectives
- Selecting the team leader and members
- Requiring performance updates at regular intervals or at key milestones
- Conducting performance reviews and holding teams accountable for performance outcomes
2
Competitive Advantage
4.5 The Critical Role of Cross-Functional Sourcing Teams
Cross-functional sourcing teams have become increasingly important as firms pursue leading-edge
supply management strategies and practices.
Cross-functional sourcing teams: consist of personnel from different functions and,
increasingly, suppliers, brought together to achieve supply management or supply chain –
related tasks.
When executed properly, cross-functional sourcing teams can bring together the knowledge and
resources required for responding to new and challenging sourcing demands, something that rigid
organizational structures are often incapable of doing.
4.5a Benefits Sought from the Cross-Functional Team Approach
When cross-functional teams meet their performance objectives, the benefits can far outweigh the
cost of using teams. The following highlights some of the benefits that organizations hope to realize
from cross-functional sourcing teams:
- Reduced time to complete a task
- Increased innovation
- Joint ownership of decisions
- Enhanced communication among functions or organizations
- Realizing synergies by combining individuals and functions
- Better identification and resolution of problems
- The need to build internal relationships through teams
4.5b Potential Drawbacks to the Cross-Functional Team Approach
The team approach requires careful management, open exchange of information between
members, motivated team members, clearly understood team goals, effective team leaders, and
adequate resources. There are potential drawbacks to the team approach when conditions do not
support an effective team effort:
1
, - Team process loss
Process loss: occurs when a team does not complete its task in the best or most efficient
manner, or members are not motivated to employ their resources to create a successful
outcome.
- Negative effects on individual members
- Poor team decisions
Groupthink: the tendency of a rational group or team to arrive at a bad decision when other
information is available.
4.5c When to Form a Cross-Functional Team
A team approach is useful when the task at hand satisfies certain characteristics. A firm faced with a
complex or large-scale business decision should consider the cross-functional team approach. A firm
can also use the team approach when a team is likely to arrive at a better solution than a person or
department acting individually.
The cross-functional team approach is also useful when no single function has the resources to solve
a problem that affects more than one department or function.
4.5d Improving Sourcing Team Effectiveness
Question 1: Does our Organization Consider Cross-Functional Team
Planning Issues when Establishing Sourcing Teams?
Successfully using teams requires extensive planning resource commitment and top management
support before a team should be established. Several sourcing team planning issues:
- Selecting a task
Meaningful task: one that requires members to use a variety of higher-level skills, supports
giving members regular feedback about performance, results in an outcome with a
significant effect on the organization and others outside the team, and provides members
autonomy for deciding how they will do the work.
- Selecting team members and leaders
An effective team member is one who meets the following requirements:
o Understands the team’s task – the member has task-relevant knowledge
o Has the time to commit to the team
o Has the ability to work with others in a group
o Can assume an organizational rather than strict functional perspective
- Training requirements
- Resource support
Question 2: Does Executive Management Practice Subtle Control over
Sourcing Teams?
Subtle control involves activities undertaken by management to increase the probability of team
success. There are several ways that management can practice subtle control over sourcing teams:
- Authorizing the creation of the sourcing team
- Selecting the team’s task
- Establishing broad objectives
- Selecting the team leader and members
- Requiring performance updates at regular intervals or at key milestones
- Conducting performance reviews and holding teams accountable for performance outcomes
2
