John N. Pearson

The impact of purchasing and supplier involvement on strategic purchasing and its impact on firm’s performance

The focus of this paper is on purchasing and supplier involvement in the firm. Using the resource‐base view of the firm, hypotheses are developed concerning purchasing/supplier involvement, strategic purchasing and firm’s financial performance. A model of the hypothesized relationships is offered and empirically tested using structural equation modeling. The model is tested using data collected in 1999. Each factor in the model is measured by a number of scale items. Based on the results of confirmatory factor analysis, an overall fit of the model to the data is achieved. Both convergent and discriminate validity is demonstrated. The research findings reveal that the hypotheses tested in the model are supported. Purchasing/supplier involvement has a positive impact on strategic purchasing, and strategic purchasing has a positive impact on firm’s financial performance. The paper concludes with some research implications, limitations of the study and suggestions for future research.

Just Modeling Through: a Rough Guide to Modeling

Skill in modeling is one of the keys to success in OR/MS practice. This has been recognized for many years, but we often give it only lip service. Models are used in many ways in OR/MS practice. A few simple principles of modeling may be useful. The six principles discussed here cover simplicity versus complexity; model development as a gradual, almost piecemeal process; dividing larger models into smaller components; using analogies; proper uses of data; and finally the way in which the modeling process can seem chaotic. Others may wish to comment on these principles and add their own.

Purchasing performance evaluation: with data envelopment analysis

Abstract Because of supply chain management and other factors, purchasings performance is considered an important element of corporate performance. Nonetheless, the measurement of purchasing performance, and comparing that performance to other purchasing departments has proven to be very difficult. These difficulties stem from the lack of valid measurement criteria and adequate methodologies to aggregate individual performance measures into a single index of overall performance. Many methodologies are unable to account for the relative importance of performance measures, which varies among firms. This paper examines the application of Data Envelopment Analysis (DEA), which has demonstrated potential as a management tool to overcome the shortcomings of other techniques and to help purchasing executives improve the efficiency of their operations. A DEA model was developed to compare the purchasing efficiency of firms in the petroleum industry. The model introduces one more method by which managers can obtain information to assist in the decision making process.

Integrating purchasing into strategic management

Abstract The authors argue that a firms ability to compete successfully in todays environment requires the integration of a sophisticated purchasing function into the strategic management decision making process. Three factors are creating the need for this integration: changes in the supply environment, increasing intensity of competition, and the changing role of the purchasing function.

JIT, system integration and customer service

Recent literature indicates there has been an absence of top management involvement in the development of customer service policies and integration of these policies into the organizational decision making process. This paper discusses the importance of integrating customer service activities into the decision making process of today’s manufacturing organizations and thus enhancing development of an organization’s competitive advantage. Just‐in‐time systems and new technologies (product, process and information) provide the mechanisms for integration of the various activities across the supply chain. Porter’s value system concept is presented as the framework for integrating a firm’s activities within the supply chain and improving their performance.

The role of purchasing/transportation in cycle time reduction

Reviews the literature of purchasing and transportation management to identify factors in the purchasing and transportation processes that influence a firm’s ability to reduce total cycle time. Presents a model of these factors to establish a framework for guiding research into comprehensive, systematic approaches to total cycle time reduction. In addition, the total cycle time model serves as a blueprint for practitioners in evaluating, in specific organizations, the effect of the purchasing and transportation processes on total cycle time. Although much of the research reviewed herein dates to the early 1980s its consideration as part of a comprehensive, systematic examination of the total cycle time concept is new.

Challenges and Approaches to Purchasing from Minority-Owned Firms: A Longitudinal Examination

Historically, large corporations and minority-business enterprises (MBEs) have encountered many impediments as they have worked together. As a result, the government has adopted public policy to help promote greater interaction between large firms and MBEs. At the same time, the competitive environment has changed in ways that make it important for large corporations and MBEs to work more closely. This paper presents the results of a study that examined the impediments and approaches to buyer/supplier relationships between Fortune 500 firms that have corporate minority purchasing programs and MBEs.

Service priorities in small and large firms engaged in international logistics

Surveys the importance of logistics services attributes to small and large international shipping firms (shippers/sellers). It appears that service priorities of international shippers are consistent with the findings of previous (US domestic) carrier selection. Reliability, transit time and cost rank in the same order for small and large firms. Significant differences exist with respect to small versus large firms concerning carrier considerations, forwarding services, shipper considerations and electronic data interchange. These results are discussed and implications for both small and large international shipping firms are formulated.

The Impact of Franchising on the Financial Performance of Small Firms

The objective of this study was to examine the relationship between form of ownership (independent vs. franchise) and financial performance of a select group of small, mature firms. MANOVA and ANOVA tests failed to identify significant performance differences. Recommendations for future research studies are mentioned. Venturing into a small business is risky. Approximately 400,000 small businesses fail each year (The State of Small Business 1986). A conservative estimate of the failure rate of start-up firms in their first 5 years is close to 65% (Hodgetts 1982). Between one-quarter to one-third fail in their first year of operation (Small Business Reporter 1986). However, many would-be entrepreneurs minimize their business risk by purchasing a franchise rather than starting from scratch. In contrast, only about 2.5% of franchise-owned outlets discontinue operations per year, many for reasons other than economic (“Franchising is Management for Success” 1986).

A longitudinal study of the role of the purchasing function: toward team participation

Abstract A follow-up survey was conducted of members of the National Association of Purchasing Management to investigate the current level of responsibility, and level of responsibility expected in 2000 on 18 key decision issues in which the purchasing function participates. The results confirm and extend the previous study which indicated a transition from individual purchasing responsibility to a team approach all key decision issues.