Strategic procurement, supplier integration, and speed‐to‐market: The mediating role of procurement lead‐time performance and manufacturing performance

Abstract

This study aims to examine how strategic procurement and supplier integration influence directly to firms' manufacturing performance and speed to market of their products, and indirectly through procurement lead‐time performance. Explanatory and cross‐sectional research design has been used for this study and the primary data were collected through a structured questionnaire from 279 middle‐higher procurement management officials of different large‐scale manufacturing firms. The structural equation model is applied to derive the research results. The study results confirm the significance of strategic procurement and supplier integration in superior manufacturing and speed‐to‐market performances. Furthermore, results reveal that firm's procurement strategy and supplier integration are key determinants of lead‐time and significantly affect the manufacturing performance. Furthermore, the results demonstrate that procurement lead‐time performance mediates the relationship between strategic procurement and speed‐to‐market. The study recommends well planned procumbent and excellent supplier integration will lead to an efficient manufacturing process and speed‐to‐market.

The Mediating Influence of Procurement Strategy on the Relationship between Physical Distribution and Availability of Contraceptives in Public Health Facilities

“…Following Tehseen et al (2017) all the variables were captured using multi-item indicators. The indicators of procurement strategy were adapted from Kumar, Ozdamar and Ng (2005), Patrucco et al (2017) and Chenini et al (2020). Indicators of physical distribution were adapted from Bienstock, Mentzer and Bird (1997) and Moons et al (2019).…”

“…Furthermore, Hesping and Schiele (2015) and Patrucco et al (2017) reveal that an organization's procurement strategy presents a blue print of how an organization carries out its procurement planning activities and determines an appropriate procurement structure that minimizes stockout situations. Chenini et al (2020) argue that an organisation's procurement strategy is a key determinant of the development of procurement plans and coordinating the procurement structure that subsequently influences the availability of products.…”

“…This would subsequently enable the facility to minimise the supply vulnerability of contraceptives, maximise the buying power and to bargain for better deals aimed at a consistent supply while, at the same time, corresponding with the external resources (Nara et al, 2020). Yanamandra (2018), Moons et al (2019) and Chenini et al (2020), argue that public health products are always affected by stochastic demands, coupled with bullwhip effects, physical distribution challenges and unreliable procurement strategies. These challenges, therefore, might require obtaining suppliers with specific assets, for instance, vehicles used in the distribution process, material handling equipment and storage facilities that enables the public health facility to observe volume assurance, safety of stock and back-up plans that would enable the public health facility or the government to search for alternative suppliers in an emergency (Williamson, 1981).…”

“…The stochasticity of demand for contraceptives that is predominant in the public health sector impacts their availability in the various facilities and therefore important to employ procurement professionals and constantly involve them in the planning process. Consistent with transaction cost economics (TCE), the stochastic demand for contraceptives in the public health sector can be managed through creating appropriate procurement strategy that is capable of consistently analyzing and forecasting procurement needs for the clients (Musonda & Gambo, 2020;Chenini et al, 2020). Furthermore, previous scholars, such as Mukasa et al (2017) and Moons et al (2019), argue that organizations' procurement strategy influences the acquisition of the right products demanded by the clients, thereby, influencing the design of the distribution networks that enhance the availability of contraceptives.…”

“…Consistent with the transaction cost economics theory (TCE), the stochastic demand for contraceptives in the public health sector can be managed through crafting appropriate procurement strategy that is capable of planning and forecasting of procurement needs (Chenini, Iqbal, Qurrahtulain, Husain Mahmood & Aldehayyat, 2020). This subsequently leads to crafting of appropriate distribution schedules that are capable of distributing contraceptives from the point of origin to the point of consumption.…”