Purchasing Perf ormance Evaluation: An Investigation of Diff erent Perspectives

Abstract

Purchasing professionals play essential roles in the purchasing decision‐making process, coordinating and guiding all buying team members to achieve the best performance of the group as a whole. This research project examines ten key purchasing performance measures as viewed by three types of players in the purchasing decision‐making processnamely, purchasing mangers, buyers, and internai customers. A key finding of the study is that the quality of purchased items presently is viewed as the most important measure, and that it should continue to be the most important measure for evaluating purchasing performance in the 1990s. It was also discovered that purchasing managers, buyers, and their internai customers hold different opinions about the measures of on‐time delivery, PO cycle time, accuracy, and professionalism. The purchasing function should evaluate the differences between the three groups with regard to these performance measures in order to effect continuous improvement and the implementation of effective, consistent purchasing strategies. Practicing managers, regardless of the function in which they work, can acquire some useful and practicai insights f rom this study by examining the weights assigned to the ten key purchasing performance measures. The views obtained f rom those participating in this study are very likely applicable in other environments as well. The last section of the study provides data that can be used in a computer program to evaluate purchasing performance.

Strategic purchasing participation, supplier selection, supplier evaluation and purchasing performance

“…_Operational purchasing performance is captured in terms of cost, quality, delivery and flexibility performance, whereas innovation represents strategic dimension of purchasing performance. The measures underlying these dimensions include cost and quality of inputs/outputs, cost of purchasing activities, procurement cycle times, on-time deliveries, inventory turns, percentage of JIT suppliers, ability to respond quickly to design changes, the ability to respond quickly to changes in production volumes or schedules, and access to new technologies, and involvement in new product development (Chao, Scheuing, and Ruch 1993;Krause, Pagell, and Curkovic 2001;Leenders et al 2002).…”

Empirical Study of Supplier Selection Practices in Supply Chain Management in Manufacturing Companies

“…Technical Chao et al [1993] Quality, delivery speed, reliability, price Wei, et al [1997] Supplier's supply history, product price, technical ability and transportation cost Krause et al [2001] Quality, delivery, flexibility, cost, innovation by the supplier is essential for the manufacturer's attempt to gain competitive advantage. Empirical articles try to find out the most important criteria for purchasing managers when selecting suppliers.…”

The Fundamentals of Global Outsourcing for Manufacturers

“…The key to enhancing the quality of decision making in supplier selection include the powerful computer-related concepts, tools and techniques that have become available in recent years (Wei et al, 1997). Chao et al (1993) concluded that quality and on-time delivery are the most important attributes of purchasing performance. Ghodsypour & O'Brien (1998) agreed that cost, quality and service are the three main factors that should influence supplier selection.…”