Organizing the purchasing department for innovation

Abstract

Innovation is by far one of the most important competitive priorities in the current business context. Companies increasingly rely on their supply base to support their innovation potential. As a consequence, the purchasing department might dramatically affect the firm's innovation capability. This paper aims to investigate-using a multiple case study approach-how the organizational design of the purchasing department could determine a firm's capability to foster and manage innovation. Seven highly innovative companies were visited and the structures of their purchasing departments were analyzed. Three different configurations for the purchasing department were identified and described.

Governance of supplier collaboration in technologically uncertain NPD projects

“…Previous studies have highlighted similar disagreements in how purchasing is viewed (Tassabehji & Moorhouse 2008). While an overwhelming amount of research points to the importance of involving purchasing in collaborative NPD with suppliers (Birou & Fawcett 1994;Cousins, et al 2006;Luzzini & Ronchi 2011;Schiele 2006;Walter 2003), there are indications that for projects with high technological uncertainty, purchasing's influence may be limited (Un, et al 2010).…”

Tactics at the category level of purchasing and supply management: sourcing levers, contingencies and performance

“…Further empirical investigation of what tactics and underlying activities category managers employ would be interesting" (Hesping and Schiele, 2015, p. 148). However, to enable these investigations, sourcing levers require more explicit conceptualisation as well as a method of measurement (Cox, 2014;Hesping and Schiele, 2015;Luzzini and Ronchi, 2011).…”

“…Essig (2011) states that "it makes sense not to talk about 'the' purchasing strategy; instead strategic sourcing decisions […] are always decided specifically for each category and their supply market conditions" (p. 143). In other words, purchasing may develop specific strategies for homogenous supply markets or families of purchased products and services (Cousins et al, 2008b;Karjalainen andSalmi, 2013), called 'categories' (O'Brien, 2012), 'commodity groups' (Schiele, 2007), 'material groups' (Horn et al, 2013), 'product groups' (Luzzini and Ronchi, 2011) and 'product families' (Monczka et al, 2008). These commodity or category groups are defined as "general categories of purchased items, including materials or services of a similar type provided by the same group of suppliers" (Schiele et al, 2011a), which constitute "a single supply market" (Schiele, 2007, p. 279).…”

“…At the same time, supplier competencies make valuable contributions to technology and innovation (Pulles et al, 2014). Therefore, most purchasing departments are expected to take a dual role: fulfilling significant cost-saving targets while managing buyer-supplier relationships in a manner that enhances innovativeness (Luzzini and Ronchi, 2011;Schiele, 2010;Schiele et al, 2011b).…”

“…As firms continue to outsource an increasing proportion of their value-added activities to suppliers, more innovations are generated through the exchange in business networks (Pulles et al, 2014). Consequently, purchasing is expected to manage buyer-supplier relationships in a way that enhances innovativeness of the firm (Luzzini and Ronchi, 2011;Schiele, 2010;Schiele et al, 2011b).…”