Purchasing's Role in Supply Chain Management

Abstract

The concept and importance of supply chain management (SCM) has been introduced and described at length in the literature. Several mostly conceptual definitions of SCM were found. To classify these multiple definitions and extend SCM to include a process orientation a conceptual model of SCM evolution was developed. This research proposes that SCM is an evolving concept with individual firms at different stages in their adoption of the concept. In its most advanced form SCM is not a subset of logistics but is a broad strategy which cuts across business processes both within the firm and through the channels required to reach the customer and involves the firm's suppliers. Thus SCM as a concept is organization‐wide; not logistics‐specific. An exploratory study of purchasing professionals was performed and it was determined that their definitions of SCM focused on developing relations with suppliers including partnerships. SCM provided purchasers multiple benefits including improved supplier coordination. This improved coordination resulted in greater commitment to long‐term supplier relations, with a focus on reducing cost to the buying organization.

The Review of Factors that Influence the Supply Chain Performance

“…The focus of traditional purchasing was to buy from the supplier that offered the lowest price; the relationship between buyer-supplier was mainly short-term (Giunipero and Brand, 1996). On the other hand, Giunipero and Brand, (1996) argues that strategic purchasing focuses on joint product innovation for competitive advantages in meeting customers demand, reducing system cycle time and cost by joint process design. Consequently, SC performance is related positively with strategic purchasing.…”

Importance Analysis of SCM Adoption Factors

“…Guinipero and Brand [22] suggested that the success of SCM depended on the level and quality of information exchanged.…”

The Predominant Role of IT as a Competitive Global SCM Strategy: The Case of Roland DG Japan, a Manufacturing Company

“…For LaLonde andBernard (1997), it improves customer satisfaction and the economies of the company, while adding value through the supply chain. According to Giunipero and Brand (1996), it improves profit and competitiveness of the company and earns customer satisfaction. More specific benefits include achieving customer satisfaction by providing the necessary inventory to meet demand (Cooper & Ellram, 1993).…”

“…There are antecedents of the Net Value framework in the perspective of the "integrative approach of value added" proposed by Giunipero and Brand (1996), and the Net Value model developed by Brandenburger and Nalebuff (1996), identifying the key players in the ecosystem of a company's business and therefore to be considered in strategic decisions: customers, suppliers, and "complementors".…”