Daniel R. Krause

Toward a Measure of Competitive Priorities for Purchasing

Abstract The purpose of this paper is to develop a set of measures of purchasing’s competitive priorities. We maintain that purchasing is a strategic contributor to the firm, and that the selection and retention of external suppliers is a fundamental and strategic purchasing task that manifests the function’s competitive priorities. Researchers and managers increasingly view the operations and purchasing functions as intimately linked, and as playing important roles in supply chain management. Ultimately, the performance of the operations management system, measured in terms of quality, cost, delivery and flexibility, depends on inputs secured by the purchasing function from the firm’s suppliers. However, in a search for substantive relationships, the purchasing literature has largely overlooked methodological issues such as measurement. Using empirical data collected from North American purchasing executives, a confirmatory factor analysis provides evidence that purchasing’s competitive priorities may be conceptualized similarly to the competitive priorities in operations, with key differences. The measures satisfy key measurement criteria including unidimensionality, convergent validity, discriminant validity, and reliability. Five competitive priorities form the basis of a multidimensional measure of purchasing’s competitive priorities, the individual factors of which will allow for the examination of linkages between purchasing, operations and other parts of the supply chain.

Success factors in supplier development

Presents results of a survey on supplier development. Surveys were mailed to a random sample of 1,504 NAPM members. The sample was split into two groups depending on how respondents judged the results of their supplier development effort, either exceeding or falling short of expectations. The responses of these two groups to various questionnaire items were investigated to identify and gain insight into factors that contribute to supplier development success. The analysis suggests that buying firm respondents who reported their firms’ supplier development efforts to be satisfactory were more likely to have a proactive philosophy regarding suppliers’ performance, put more effort and resources into their supplier development efforts, and exhibit a greater willingness to share information with their suppliers than their counterparts who were generally dissatisfied with their firms’ supplier development results.

Critical elements of supplier development The buying-firm perspective

Abstract Supplier development is defined as any effort of a buying firm with its supplier to increase the performance and/or capabilities of the supplier and meet the buying firms supply needs. From the buying firms perspective, effective two-way communication, top management involvement, teams, and purchasing a relatively large percentage of the suppliers output are critical to the supplier development effort. This article (1) discusses the importance of supplier development, (2) reviews literature to identify potential critical elements of supplier development, and (3) reports the results of an analysis of survey data from US buying firms that explored these critical elements.

A multiple-method study of environmental uncertainty and manufacturing flexibility

Abstract This paper addresses the relationship between environmental uncertainty and operational flexibility through research that utilized a mail survey of North American manufacturers, and structured field interviews of users of advanced manufacturing technologies (AMT). Results from these efforts include: (1) no relationship was found between the measures of environmental uncertainty and operational flexibility, (2) no relationship was found between a firms performance and its effort to align the level of operational flexibility with its external environment, and (3) the sample of AMT users reported more certain external environments than the random survey sample of manufacturers. The qualitative data gathered during the structured interviews is used to help explain these results, which redefine the boundaries of existing theory on these relationships and provide direction for future research.

Supplier development: communication approaches, activities and goals

Operations managers rely on the purchasing function to obtain production inputs from suppliers and to ensure supplier performance. The link between supplier development activities performed by buying firms with their suppliers, in terms of operational outcomes and impact on competitive advantage for the buying firm has been well documented. However, a buying firm should, prior to setting up a supplier development program and investing in supplier development activities, establish goals it wants to achieve and determine how to achieve these goals. Until now, supplier development goals in general and their relationship with supplier development activities have received little research attention. The results from this empirical study suggest that the relationship between the goal to improve a suppliers capabilities and knowledge transfer from the buyer to the supplier firm is moderated by the degree of human interaction. Buying firms pursuing the strategy to improve supplier capabilities rely more intensively on training and co-location of buyer and supplier employees to leverage the knowledge transfer to the supplier firm.

Supplier Partnerships in Manufacturing Versus Non‐Manufacturing Firms

While the concept of partnerships has received much attention in the literature, the focus has primarily been on the manufacturing firm. This paper explores the similarities and differences in partnerships from the perspectives of manufacturing and non‐manufacturing firms. Findings indicate that non‐manufacturing firms have had longer relationships with their partners than manufacturing firms. In addition, non‐manufacturing firms considered a reduction of procurement and administrative costs, in addition to price and reliability, as important reasons to enter partnerships, while manufacturing firms emphasized the price, quality, and delivery of products.