In scientific terms a black box is a device, system, or object which can be viewed in terms of its inputs and outputs, without any knowledge of its internal workings. Its implementation is opaque or “black.” Almost anything might be referred to as a black box: a transistor, an algorithm, or even the human brain.
The opposite of a black box is a system where the inner components or logic are available for inspection, which is most commonly referred to as a white box (which can also come be called a “clear box” or a “glass box”).
Have a think about how black box theory might be applied for procurement professionals.
For example we may have an upcoming project where the needs are not clear, from the suppliers perspective the tender is supposed to describe a mixture of needs (inputs) and deliverable (outputs) but the specification is too confusing which makes the tender black or difficult to follow. When there is uncertainty, financial risk and extra padding is likely to occur which means risk drivers influence some of the cost drivers.
If demand uncertainty exist this is likely to influence financial risk and cost flexibility.
A white box on the other hand is transparent and clear. The best way to achieve transparency is to have clear dialogue and open conversations early on before a tender is issued. Keeping suppliers at arms length doesn’t improve competition, making suppliers work out what you want by issuing unclear requirements is akin to throwing out a black box in order for suppliers to determine what stimuli is required to meet or exceed client requirements.
You can read an academic version if you want more information in relation to black box and the supply chain
