From Purchasing to Supply Management: A Study of the Benefits and Critical Factors of Evolution to Best PracticeSupply management has received increased attention both in research and practice only recently. For decades, purchasing management was considered one of the least complex business functions. However, in a world of decreasing in-house value add in nearly all industries, it has become strategically critical for most companies to pay closer attention to purchasing spend. Many companies found that there is a lot more to have from suppliers than "the right goods at the right place at the right time". Several researchers investigating the transition from traditional purchasing to strategic supply management found a discrepancy between the general discussion of strategic supply management and reality in most companies. Given the well-known examples of high-performing purchasing organizations and the myriade of books both by researchers and practitioners on what good practices in supply management look like, this is an interesting observation. This dissertation investigates reasons for this discrepancy to help companies overcome the barriers of purchasing evolution. Michael Stolle combines organizational theories on organizational learning, resource-based view, and principal-agent conflicts to explain the challenges such a profound change of mindsets and culture presents. He develops a theoretical framework of purchasing evolution that shows the complex interactions of different driving factors that have to go together to make a successful transition possible. Finally, an interview-based empirical study is used to verify this framework empirically. |
Contents
A brief overview of the status quo in PSM evolution research 11 | 10 |
The continuum from purchasing to supply management | 18 |
Purchasing evolution model by Reck and Long | 20 |
Purchasing evolution model by Burt and Starling | 21 |
Supply Management Value Chain by Kaufmann | 23 |
Figure 5 Supply Management Navigator by Jahns | 25 |
Four Pillars of Purchasing and Supply Chain Excellence by Monczka Trent and Handfield | 27 |
Overview of selected prior empirical studies | 29 |
Figure 15 General model of adaptive behavior by March and Simon | 55 |
Figure 16 Theory of performance feedback by Greve | 56 |
A new conceptual model of drivers of PSM evolution | 67 |
Figure 18 The Scurves of PSM evolution | 104 |
An empirical analysis of drivers of PSM evolution | 107 |
Figure 19 Example dimension of interview guide | 121 |
Figure 20 Contacting process funnel | 127 |
Figure 21 Representation of the population | 129 |
Correlation results found by Tan Kannan and Handfield | 30 |
Framework of strategic role of purchasing by Goh Lau and Neo | 31 |
Figure 10 Confirmation of purchasing competence construct by Das and Narasimhan | 36 |
Model of strategically managed buyersupplier relationships by Carr and Pearson | 37 |
Figure 12 Model of strategic purchasing and supply management by Chen Paulraj and Lado | 39 |
Model of the impact of strategic skills by Eltantawy | 40 |
Organization theories perspectives on PSM evolution | 45 |
Figure 14 Basic assumptions of resourcebased view theory by Barney | 48 |
Figure 22 Distribution of average survey scores | 138 |
Figure 23 Conceptual example of missing value influence | 141 |
Figure 24 Comparison of CPOs selfassessment to average interview score | 156 |
Figure 25 Overview of significant path relationships | 178 |
Figure 26 Simplified example model | 179 |
Summary and conclusions 185 | 184 |
| 193 | |
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Common terms and phrases
Accordingly activities approach areas assessment assumed authors average chapter company performance compared competitive advantage conceptual considered constructs contribution cooperation core corporate cost cross-functional dimensions direct discussed effect empirical studies et al evaluation example expected findings firm focus framework function further hypothesized impact implementation implies important improve indicators individual industries influence integration interview involvement involvement of PSM knowledge largely latent learning least limited mindsets and aspirations objective organization organizational outcomes participants path perceived performance measures positive potential processes professionals PSM evolution PSM performance PSM practices purchasing and supply purchasing function purchasing practices questions reduction relationships relevant reported response role sample scores seems share significant specific step strategic involvement structural success suggested supplier supply management survey sustained theoretical theory validity value creation strategies variables