Arjan J. van Weele

Managing supplier involvement in product development:: Three critical issues

Despite some successes in involving suppliers early and intensively in product development within the automotive and electronics industries, many companies still experience substantial difficulties in managing this involvement. This article examines three related critical issues: (a) identifying specific processes and tasks for the broader area of purchasing involvement in product development; (b) forming an organisation that supports the execution of such tasks; and (c) staffing the organisation with people that have the right skills.

Exploring purchasing integration in product development

With increasing outsourcing and the growing importance of product innovation as a means for creating competitive advantage, the integration of purchasing and product development processes has become a key issue for many firms. Although, consequently, the integration of purchasing and suppliers in product development has attracted growing attention from practitioners and researchers, most research on the topic remains limited to the context of single development projects. The integration with long-term issues such as technological alignment between supplier and manufacturer is often neglected. This limited conception and the lack of a coherent definition of what purchasing integration in product involvement is form a major impediment to the advancement of knowledge in this field. Therefore, this article develops a framework encompassing various activities across different management levels, which embody the alignment and integration of purchasing and product development processes.

Performance outcomes and success factors of vendor managed inventory (VMI)

Purpose – The purpose of this paper is to seek to investigate performance outcomes of vendor managed inventory (VMI) from a buyers perspective and enablers for its successful application.Design/methodology/approach – Structural equation modelling through Partial Least Squares (PLS) is used to identify relationships between four enablers (information systems, information sharing, information quality, and relationship quality), perceived VMI success, and three outcomes (cost reductions, customer service, and supply chain control).Findings – Buyer‐perceived VMI success is impacted by the quality of the buyer‐supplier relationship, the quality of the IT‐system and the intensity of information sharing, but not by the actual quality of the information shared. Furthermore, VMI leads to three performance outcomes: higher customer service levels, improved supply chain control and, to a lesser extent, cost reduction.Research limitations/implications – Although theory stipulates a positive impact of high quality in...

Revolution in purchasing: building competitive power through proactive purchasing

New concepts in the field of purchasing, such as outsourcing, supply-base management and value-chain management, have become increasingly common practice. Because of the crossfunctional character of these concepts, the call for a strategic reorientation of the purchasing function becomes louder. However, a clear future vision to guide the purchasing process has not yet matured. We investigated the most prominent developments and the expected trends in the profession, as well as the role and position that purchasing is probably going to have in major companies ten years from now. This article will start with a description of the changing business context with which companies are currently confronted. This is followed by an overview of the purchasing and supply practices of leading-edge companies. We conclude with a model for future purchasing organizations to make simultaneous improvements both in increasing functional expertise and in horizontal synergy. Copyright

Driving and enabling factors for purchasing involvement in product development

This article is the second in a series of two focusing on the involvement of suppliers and, more specifically, the purchasing function in product development. The first article introduced a framework defining purchasing involvement in product development in terms of a series of specific activities across four different management areas. This second article extends the framework into a basic contingency model by identifying driving and enabling factors that influence the need for and the ability of firms to carry out the various activities from our framework. In that way, it provides indications in which situations certain activities are more important than others and suggestions as to how to enable an organisation to perform purchasing involvement in product development in an effective and efficient way.

Factors that Determine the Extent of Business Process Standardization and the Subsequent Effect on Business Performance

Business process standardization is the activity of unifying different variants of a family of business processes. While the positive effects of business process standardization are well-described, it is often undesirable to fully unify different variants due to cultural, legal, or operational reasons. Consequently, a decision has to be made about the extent to which a family of business processes should be standardized. However, little is known about the factors that drive that decision. This paper fills that gap, by presenting factors that drive the extent to which business processes can be standardized, performance properties that are influenced by business process standardization, and relations between these concepts.

Fostering incremental and radical innovation through performance-based contracting in buyer-supplier relationships

While anecdotal evidence suggests that performance-based contracts (PBCs) may foster innovation in buyer-supplier relationships, the understanding of the underlying mechanisms is limited to date. The purpose of this paper is to draw on transaction cost economics and agency theory to develop a theoretical model that explains how PBCs may lead to innovation. Using data on 106 inter-organizational relationships from the Dutch maintenance industry, the authors investigate how the two main features of PBCs – low-term specificity and performance-based rewards – affect incremental and radical innovation. The authors find that term specificity has an inverse-U-shaped effect on incremental innovation and a non-significant negative effect on radical innovation. Furthermore, pay-for-performance has a stronger positive effect on radical innovation than on incremental innovation. The findings suggest that in pursuit of incremental innovation, organizations should draft contracts with low, but not too low, term specificity and incorporate performance-based rewards. Radical innovation may be achieved by rewarding suppliers for their performance only. The findings suggest that in pursuit of incremental innovation, organizations should draft contracts with low, but not too low, term specificity and incorporate performance-based rewards. Radical innovation requires rewarding suppliers for their performance only.

Harmonization of business process models

When multiple similar business processes must be designed, a trade-off is necessary between designing a single, standardized, process or designing multiple, specific, processes. Standardization, on the one hand, helps to benefit from re-use of resources and to reduce redundancy. Specificity, on the other hand, helps to tailor the processes to specific needs. The activity of deciding on this trade-off is called harmonization. This paper operationalizes the notion of process harmonization, identifies aspects that determine harmonization and defines metrics to determine the level of harmonization. Furthermore, it presents the factors that influence the level of harmonization that can be achieved in a company. The harmonization aspects and factors are extracted from case studies in practice. Together the metrics, aspects and factors can be used to determine the current and optimal level of harmonization for a company.

A Dutch-French comparison of dependence, trust and commitment in buyer supplier relationships: A purchasing portfolio approach

National culture is likely to affect trust, commitment and dependence in buyer-supplier relationships. Yet, empirical research on buyer-supplier relationships in different cultural settings is still limited. This article presents the findings of an exploratory study into the role of culture in different types of buyer-supplier relationships. Hypotheses have been tested, using data from a survey among 84 French purchasing professionals and data gathered before in the Netherlands with 216 colleagues. A comparative analysis revealed that the cultural background of purchasers does affect their perceptions of trust, commitment and dependence in supplier relationships. French purchasers demonstrate lower levels of (affective) commitment, competence trust and goodwill trust towards their suppliers, compared to their Dutch colleagues. These findings are inconsistent to what French-Dutch intercultural studies suggest. Focus group discussions indicate that Professional Culture might be more important than National Culture for the explanation of differences in buyer-supplier relationships.

Responsible purchasing: moving from compliance to value creation in supplier relationships

Nowadays, supply chain relationships represent an important risk factor to companies due to a cost-driven purchasing orientation. By relentlessly driving down cost in supply chain relationships, supplier relationships may suffer. In addition, through outsourcing and global sourcing, companies have not only created highly complex supply chains, but also supply chains that are not transparent. When irregularities arise, such as child labor and environmental problems in supplier relationships, the company’s reputation may suffer and supply can no longer be secured.