Determinants of purchasing team usage in the supply chain

Abstract

Increased attention on supply chain management has highlighted the pivotal role that supply chain management and purchasing teams can play in the overall competitiveness of many firms. This paper presents findings from an exploratory study that analyzes the impact of purchasing’s strategic role, industry context and purchasing organizational structure, on the use of various forms of purchasing teams. Using survey data from a broad sample of industries, we found that team usage was a two‐dimensional construct: internal teams and councils, and customer teams. In addition, purchasing’s strategic role comprised two factors: product and technology planning, and external systems planning. After controlling for firm size, purchasing’s strategic role was positively related to the greater use of internal teams and councils, but not customer teams. Industry context also played a role in the usage of teams, with internal teams and councils more extensively used by the firms that manufactured discrete goods. Meanwhile, firms in the service sector favored the use of customer teams. Finally, both industry context and purchasing’s organizational structure were related to the strategic role assumed by purchasing, with a decentralized structure tending to reduce that strategic role.

Purchasing Organization and Design: A Literature Review

“…The difference might be caused by legal regulations, which require that public funds have to be spent transparently and which necessitate a formal and complex public purchasing process. Johnson, Leenders and Fearon (1998a) and Johnson, Klassen, Leenders, and Fearon (2002) studied the structure of purchasing in service and manufacturing industries and found that service firms are more often centralized than manufacturing companies and that purchasing teams that involve customers prevail in the service industry. In contrast, manufacturing companies have a stronger tendency to (partially) decentralize their purchasing activities and use purchasing teams solely made up of members of the organization.…”

“…The relationship was analyzed by Johnson, Leenders, and Fearon (1998b) and Johnson, Klassen, Leenders, and Fearon (2002), who studied the degree of centralization as a determinant of the use of different purchasing techniques and the strategic impact of purchasing on the company. Their results indicate that centralized purchasing departments exert a higher influence on major corporate activities than decentralized departments and consequently enjoy a higher strategic role.…”

“…The first stream of research studied the degree of team usage in purchasing. Thereby, authors attempted to identify factors that influence the use of teams in purchasing and found that factors such as the novelty and volume of a purchase (Grønhaug 1975), the structure of the organization as a whole and the characteristics of the CPO (Johnson, Leenders, and Fearon 1998b) as well as industry context and firm size (Johnson, Klassen, Leenders, and Fearon 2002) are critical determinants of team usage. The results of the studies indicate that teams are especially used in case complex purchases necessitate joint decision making and/or the areas.…”

An environmental uncertainty-based diagnostic reference tool for evaluating the performance of supply chain value streams

“…Environment is defined as the aggregate of factors that have an impact or the potential to have an impact on an organisation's functioning (Emery and Trist 1965;Thompson 1967). The choice of uncertainty as the sole input variable is predicated on the co-alignment and contingency theories which both play an important role in organisational and operations management research (Hofer 1975;Carroll 1993;Johnson et al 2002).…”

“…6 The choice of uncertainty as the input variable in the reference model is predicated on the coalignment and contingency theories of management. Both theories play an important role in organisational research (Carroll 1993;Johnson et al 2002). Van der Vorst and Beulens (2002) pointed out that the literature unanimously recognises that uncertainties in supply, process and demand have a major impact on the manufacturing function.…”