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Purchasing's Interaction with Customers: The Effects on Customer Satisfaction—A Case Study
Abstract
A significant number of purchasing organizations find themselves working to improve both their image and customer satisfaction. This article describes the experiences of a purchasing organization, in one division of an oil company, that had tried unsuccessfully for ten years to improve customer satisfaction by measuring performance and improving supplier reliability. Management then employed a somewhat broader approach to improving purchasing performance in the area of capital equipment purchases: interacting more closely with internal customers.
To evaluate the effects of this approach on customer satisfaction, upper‐ and middle‐level managers in purchasing's two largest internal customer organizations, Engineering and Maintenance, were surveyed—first in the Northern Division, where both past efforts and the current intervention had been implemented, and in a similar division, the Southern Division, where only past efforts had been applied. The results indicate that interacting more closely with customers can improve customer perceptions of purchasing's responsiveness and professionalism, but that technical knowledge may play a greater role in improving perceptions of the value added by purchasing. The experiences of this purchasing organization provide general insights on approaches to perceived performance improvement.
... Indeed, in line with SET, the purchaser expects that satisfying the internal customer will be rewarded by, for instance, being involved at an early stage in future sourcing projects (Emerson, 1976). Furthermore, involving purchasing at an earlier stage often implies a closer internal customer interaction (Bals et al., 2009), yielding a timely and enhanced mutual understanding between purchasing (understanding the internal customer's needs) and the internal customer (understanding purchasing procedures; Rossler and Hirsz (1996)). Through this, purchasing gains insight soon in the internal customer's expectations with respect to the sourcing project through which communication, knowledge and information sharing (Ellegaard and Koch, 2012;Rossler and Hirsz, 1996;Werr and Pemer, 2007), and hence purchasing's internal service performance, improves (Fredendall et al., 2005). ...
... Furthermore, involving purchasing at an earlier stage often implies a closer internal customer interaction (Bals et al., 2009), yielding a timely and enhanced mutual understanding between purchasing (understanding the internal customer's needs) and the internal customer (understanding purchasing procedures; Rossler and Hirsz (1996)). Through this, purchasing gains insight soon in the internal customer's expectations with respect to the sourcing project through which communication, knowledge and information sharing (Ellegaard and Koch, 2012;Rossler and Hirsz, 1996;Werr and Pemer, 2007), and hence purchasing's internal service performance, improves (Fredendall et al., 2005). Combining the ideas that early involvement of purchasing enhances the purchasing professional's incentive to satisfy its internal customer, as well as the mutual understanding and cooperation between internal customer and purchaser driving the latter's ISQ, the authors state: ...
As in many organizations the role of the purchasing department is shifting from a clerical buying function to an internally integrated, strategic business function, purchasing professionals are increasingly involved in sourcing projects. Building on Social Exchange Theory, this study explores the effects of early purchasing involvement on internal customer satisfaction and cost savings in sourcing projects, as well as how this involvement is bounded by the strategic impact of the sourcing project. To this end, the authors gathered data on 644 sourcing projects from a database of a large, private financial services company. A research model deploying the research hypotheses was analyzed using Bayesian structural equation modeling. This technique introduced and highlighted as a valuable and more correct estimation procedure in hypothesis testing research involving ordered-categorical data. The results confirm that early purchasing involvement enhances the cost savings outcome in sourcing projects. However, this involvement has remained underutilized for projects with high strategic impact. This study empirically establishes the importance of purchasing professionals for realizing cost savings in sourcing projects.
... OBE is a new concept, although researchers have explored similar concepts: they have studied purchasing efficiency (Rossler and Hirsz, 1996), purchasing effectiveness (Janda and Seshardri, 2001), purchasing efficacy (Baier et al., 2008), and buying center value (Hult et al., 2007). However, these studies have investigated only certain aspects of purchasing effectiveness. ...
... Some purchasing researchers have considered efficiency to be equivalent to performance (e.g., Giunipero and Brewer, 1993); thus, the more efficient purchasing is, the lower the total cost of ownership and greater the economic value transmitted to the customer. Apart from this economic perspective on purchasing, Rossler and Hirsz (1996) propose a customer-oriented purchasing performance that incorporates a wider set of dimensions, including communication, responsiveness, and customer concerns. Speakman et al. (1999) warn that, apart from lowering the total cost of purchasing, other metrics are useful in measuring purchasing performance. ...
Early literature considers purchasing as a supportive activity in the traditional corporate value chain rather than as having an influence on customer value creation. This study builds on the concept that purchasing should provide value for the direct downstream customer in the supply chain and that this value represents the measure of its effectiveness. By employing theoretical triangulation, early organizational effectiveness literature provided a solid foundation for the development of the concept of organizational buying effectiveness (OBE). This study investigates the measurement properties and external validity of the OBE concept. The findings are based on a survey of 123 large and medium manufacturing firms in Croatia. The OBE scale exhibits sound metric properties and a satisfactory level of external validity, thereby confirming the plausibility of theoretical triangulation. Further, the theoretical and managerial implications for constituent fields, the study's limitations, and suggestions for further research are discussed.
... The second approach has been for researchers to develop perceptions-only measures of ISQ, usually from scratch. These include the provision of banking services (Lewis and Gabrielsen, 1998), insurance services (Hallowell et al., 1996), procurement services (Cavinato, 1987;Hendrick and Ruch, 1988;Rossler and Hirsz, 1996;Finn et al., 1996;Croom and Brandon-Jones, 2007), and generic internal services (McDermott and Emerson, 1991;Gilbert, 2000;Bruhn, 2003). ...
... Step 2 Measuring internal service quality that emphasise the critical importance of providing adequate help to individuals who encounter problems with an internal service (Bruhn, 2003;Cavinato, 1987;Chaston, 1994;Finn et al., 1996;Grönroos, 1988;Johnston and Silvestro, 1990;Kang et al., 2002;McDermott and Emerson, 1991;Parasuraman et al., 1985Parasuraman et al., , 1988Pitt et al., 1995Pitt et al., , 1997Rossler and Hirsz, 1996;van Dyke et al., 1997;Young and Varble, 1997). Whilst content and usability are correlated to the OEPQ rating, they produce only a marginal improvement to the regression model and are not statistically significant. ...
This paper examines the role of expectations in the measurement of perceived quality in internal service contexts. Our research examines the debates in the literature regarding both the theoretical and practical efficacy of expectations data in the measurement of internal service quality. Based on data collected from the internal customers of e- procurement systems in four organizations, two generic approaches to internal service quality measurement are tested empirically: a gap-based and a perceptions-only
... procurement quality. Of particular interest to this study are scales developed in a procurement context. Cavinato (1987) posits a set of five factors for measuring the service provision of a purchasing function: output of purchasing; interactions with purchasing; observations of purchasing; reputation of purchasing; and, expectations of purchasing. Rossler and Hirsz (1996) focus more specifically on outcome related performance measures in order to examine and understand user perceptions of procurement quality -service, accuracy, communication, responsiveness, professionalism, technical knowledge, and customer concerns. In contrast, Marshall et al. (1998) examine the processes by which quality is enhanced ...
... In terms of processing, order-to-supplier speed is an important component of perceived quality. One obvious benefit of e-procurement is that once approved, orders are sent instantaneously to suppliers, which is an improvement to sending orders by post or fax (Rossler and Hirsz, 1996). Order accuracy can be ensured through efficient processing given the reduction in data reentry across the purchasing process (Lancioni et al. 2000). ...
Purpose
Whilst e‐procurement has significant potential to reduce the purchasing costs of an organisation, the realisation of these savings requires user compliance. The purpose of this paper is to examine the extent to which user‐perceived e‐procurement quality (EPQ) (operationalised through the dimensions of professionalism, processing, training, specification, content, and usability) influences both system and contract compliance.
Design/methodology/approach
User perceptions of EPQ were examined in four UK organisations using survey data from 274 respondents.
Findings
Strong evidence was found of a positive relationship between user‐perceived EPQ and both system and contract compliance. System compliance was most strongly influenced by professionalism and content dimensions, whilst contract compliance was most strongly influenced by processing, specification, and content dimensions.
Research limitations/implications
Data were collected from e‐procurement users in four organisations, which may limit the extent to which findings can be generalised.
Practical implications
User perceptions of e‐procurement provision significantly influence system and contract adoption. Practitioners should pay attention to management of different dimensions of perceived quality as they may have different effects on both contract and system compliance.
Originality/value
This paper is the first to empirically assess the relationship between user‐perceived EPQ and compliance. Its findings challenge the assumption that the monopolistic dynamics common within internal services, such as e‐procurement provision, are sufficient to ensure compliance. Dissatisfied individuals invariably find ways to circumvent mandatory systems and contracts.
... The second approach has been for researchers to develop perceptions-only measures of ISQ, usually from scratch. These include the provision of banking services (Lewis and Gabrielsen, 1998), insurance services (Hallowell et al., 1996), procurement services (Cavinato, 1987; Hendrick and Ruch, 1988; Rossler and Hirsz, 1996; Finn et al., 1996; Croom and Brandon-Jones, 2007), and generic internal services (McDermott and Emerson, 1991; Gilbert, 2000; Bruhn, 2003). Before exploring the debate concerning alternative approaches to ISQ measurement, let us first consider the differences between external and internal customers which have led some academics to call into question the transferability of external service quality measurement approaches to internal services. ...
... In addition, the attitude shown by support personnel is also considered. The dominance of professionalism is perhaps unsurprising given the large number of studies Measuring internal service quality that emphasise the critical importance of providing adequate help to individuals who encounter problems with an internal service (Bruhn, 2003; Cavinato, 1987; Chaston, 1994; Finn et al., 1996; Grönroos, 1988; Johnston and Silvestro, 1990; Kang et al., 2002; McDermott and Emerson, 1991; Parasuraman et al., 1985 Parasuraman et al., , 1988 Pitt et al., 1995 Pitt et al., , 1997 Rossler and Hirsz, 1996; van Dyke et al., 1997; Young and Varble, 1997). Whilst content and usability are correlated to the OEPQ rating, they produce only a marginal improvement to the regression model and are not statistically significant. ...
Purpose
This paper aims to build upon the debate in the service quality literature regarding both the theoretical and practical effectiveness of expectations data in the measurement of internal service quality (ISQ). Gap‐based and perceptions‐only approaches to measuring ISQ are tested and their respective benefits and limitations evaluated.
Design/methodology/approach
The internal service context used in this study is the provision of e‐procurement software, training, and user support in four organisations. The two approaches are evaluated in terms of reliability and validity, as well as pragmatic aspects of survey administration.
Findings
The various tests carried out indicate that both the gap‐measure and perceptions‐only measure are reliable and valid, the latter being the marginally higher performer. Both approaches were found to have benefits and limitations, and so the empirical study, combined with contributions from the literature, generates some understanding of the internal service context in which the two approaches might be appropriate.
Research limitations/implications
The survey was based on an internal e‐procurement service; as such, the variables and dimensions selected to measure ISQ in this context inevitably limit the scope of the research.
Practical implications
For operations managers, the paper clarifies the basis on which they might choose between the two approaches to ISQ measurement.
Originality/value
This study is the first to directly test and compare the relative merits of these two approaches to ISQ measurement. The paper also offers insights as to the operational contexts in which each approach might be appropriate.
... These include fast delivery, reliable service and product, and facts about possible delivery and quality difficulties. Rossler and Hirsz [12] worked on the internal service quality. They discovered that collaboration with internal customers improved the opinion that procurement was responsive to the needs, where technical awareness was important to satisfactory performance. ...
... The outcomes in Table 1, are grounded in practice from ADS Industry Members, and reflect the changes observed in the literature where early studies positioned purchasing as a secondary and supportive service activity in the traditional corporate value chain (Leenders et al., 1994;Ramsay, 2001), to the view that purchasing plays a pivotal role in customer value creation (e.g., Lindgreen & Wynstra, 2005;Rozemeijer, 2008). Early purchasing performance models dealt with efficiency outcomes based on accounting principles (e.g., Rossler & Hirsz, 1996) but now more intangible dimensions, such as successful supplier relationships are defined as a more useful measure of purchasing effectiveness (Janda and Seshardi, 2001). ...
Abstract
The primary aim of this research project is to qualitatively analyse the validity of critical success factors for successful supply chain relationships based on the author’s Distance, Power and Alignment Framework generated via a critical review of the literature. The Distance, Power and Alignment Framework is based upon the competing supply chain philosophies of lean, agile and power based configurations, and the purpose of the framework is to allow a balanced view of supply chain relationships to be developed to drive performance and achieve results as ‘one size does not fit all’.
A phenomenological approach was taken in order to meet this objective, with Perry’s (1998) ‘realist’ research paradigm being adopted, allowing research methods to be both inductive and deductive by the utilisation of pluralistic grounded theory (Perry, 1998). Secondary research in the form of the author’s observations and theory is used to triangulate with a critical incident technique interview (Flanagan, 1954) with two senior executives representing the Units Commodity Group, and findings from a focus group of six participants representing the Specialised Fabrications Commodity Group.
The findings suggest that though successful in determining validity of the Distance, Power and Alignment framework within the scope of the investigation, further work must be undertaken longitudinally and in different commodity groups and/or companies to confirm construct, internal and external validity (Riege, 2003).
A key finding of the thesis is that not only should distance, power and alignment constructs be considered when developing supply chain relationships, but they are interdependent and a change in one can impact the effectiveness of other elements. This can used to seek competitive advantage if decision makers are aware of the linkages, or poses a risk to relationships with decisions are made in isolation.
A revised Distance, Power and Alignment framework for successful supply chain relationships is presented at the end of this thesis, inducting research findings before reflections on the author’s personal journey, limitations and scope for future research.
... A seguir, uma breve explicação conforme Schiele (2005) Apesar da importância do envolvimento, há fatores que impedem de maneira significativa que isto ocorra. Estes incluem confiança (WEST, 1997), a percepção do valor que o profissionais de compras possa agregar (ROSSLER; HIRSZ, 1996;WEST, 1997;LAKEMOND;ECHTELT;WYNSTRA, 2001;ZSIDISIN;ELLRAM, 2001) e o conhecimento e a experiência do profissionais de compras sobre o objeto de contratação (WEST, 1997). Desta maneira, entender as relações entre as duas entidades envolvidas (os profissionais de Compras e os Cleintes Internos) tem na Teoria da Agência um referencial teórico que endereça o assunto de maneira pertinente, como será apresentado na sequência. ...
... The authors emphasize that the purchasing manager should create strong external cooperation by establishing a system of communication, and ensure shared goals with suppliers (Stanley & Wisner, 2001) According to a study by Wisner and Stanley (1999), the purchasing units that provide high internal service quality are those that are more proactive, open and ready to flexibly meet internal customer needs and expectations. Rossler and Hirsz's (1995) results further suggest that close interaction with internal customers improves these customers' perceptions of the purchasing unit's responsiveness to their needs. Internal customers of the purchasing unit also rely on the actions taken by other supporting functions such as warehousing and inventory management (Stanley & Wisner, 2001). ...
Business travel has increased substantially during the past few decades. Business travel costs are one of the main controllable costs in international corporations, and thus companies are imposing stricter policies on corporate travel to create savings and efficiency. For travel management, the current literature suggests two alternative management strategies based on either a control-oriented or a commitment-oriented approach. In this paper we present an in-depth case study that investigates the impact that each type of strategy has on corporate travel policy compliance. Specifically, we investigate how the strategies are executed in a triadic travel supply chain setting, consisting of a corporate travel buyer, a business travel agency and a technology provider. Our findings show that both the control and commitment-based strategies are used in all stages of the travel process. The seminal finding is that the competitiveness and high quality of services provided internally by the buyer in collaboration with the triad members – rather than strict control and monitoring – is essential to travel policy compliance. This finding shows that corporate travel management shares similar perspectives to leisure travel in that service quality is key to securing business. Furthermore, a proactive approach to control via a well-established and reasonable travel policy is needed.
... Most purchasing performance models deal with efficiency outcomes based on accounting principles (e.g., Rossler & Hirsz, 1996). Undoubtedly, efficiency is an important purchasing issue; however, it is not sufficient for clarifying the value-adding role of purchasing in the supply chain context. ...
The role of key supplier relationships and their link with purchasing performance are poorly recognized in current business-to-business marketing literature. Given the predominance of collaborative supply chain relationships, purchasing must be considered to be providing value, thereby implying its effective nature. This study introduces a conceptual model of the relationship between supply chain orientation (SCO) and key supplier relationship management (KSRM) with organizational buying effectiveness (OBE) as a measure of effective purchasing behavior. To extend the model's nomological network, we link OBE with firm profitability. We find that SCO and KSRM have a strong positive influence on OBE. Furthermore, KSRM is demonstrated to be a significant mediator in the SCO–OBE relationship. Finally, OBE significantly and positively influences firm profitability, suggesting that it adequately addresses the aspects of effective purchasing behavior. We also discuss theoretical and managerial implications as well as future research directions in light of the limitations of this study.
... Whilst there have been studies examining user perceptions in traditional procurement settings (Cavinato, 1987;Hendrick and Ruch, 1988;Rossler and Hirsz, 1996;Marshall et al. 1998), the idea has received relatively little attention in an eprocurement context. In addition, whilst the value of developing robust construct measures has been highlighted by numerous researchers (cf. ...
The advent of e-procurement has created significant potential to reduce the total cost of purchasing. However, without the commitment of internal users to adopt e-procurement systems and contracts, savings are unlikely to be realised. This paper presents a study of user-perceived e-procurement quality - Perceived EPQ - with the aim of developing a multi-item construct measure to help improve e-procurement compliance. The research adopted a mixed-methods approach incorporating 58 interviews and a survey of 295 users across four organisations. The research makes two significant contributions. Firstly, the study proposes a 6-factor, 30-item measure of Perceived EPQ which exhibits high levels of reliability and validity. This scale can be used to measure users' attitudes toward an e- procurement system and its support, and thus focus improvement efforts on areas of dissatisfaction. Secondly, it provides a methodological template for researchers within OM looking to use interview and survey data in combination when developing construct measures.
... Accordingly, various researchers have sought to identify key service quality dimensions that best fit purchasing's internal customer service. Rossler and Hirsz (1995) have empirically identified seven underlying dimensions of purchasing service quality: collaboration, accuracy, communication, responsiveness, professionalism, technical knowledge, and internal customer concerns. Finn et al. (1996) find, through a series of interviews with purchasing's internal customers and mail surveys, six key service quality attributes: tender loving care, delivering value, correct and rapid order processing, effective vendor management, purchasing knowledge, and no surprises (keeping promises and keeping users informed). ...
Although it has been widely accepted that internal customer service quality leads to internal customer satisfaction and in turn external customer satisfaction, relatively little research has focused on the dimensions of internal customer service quality and their differing impacts on internal customer satisfaction. This empirical study identifies six key internal service quality dimensions as perceived by the purchasing department's internal customers: customer intimacy, team-based continuous improvement, communication, reliability/competence, requisition process and tangibles. In addition, this study reveals the following factors. First, customer intimacy is the most influential dimension to achieve both high internal customer service quality and satisfaction. Second, team-based continuous improvement and requisition process are the second and third most important dimensions of service quality but not significantly associated with internal customer satisfaction. Third, conversely, communication is the second most influential dimension for internal customer satisfaction but not with internal customer service quality. Finally, there is a significantly positive association between internal customer service quality and satisfaction. Managerial implications and recommendations are also presented.
... This is known from strategy literature as cost leadership strategy (Porter 1998). Besides this purely economic approach to efficiency, Rossler and Hirsz (1996) propose a customer-oriented purchasing performance measurement which incorporates a broader set of items including communication, responsiveness, and customer concerns. Effectiveness has rather different goals. ...
The idea of effectiveness measurement in supply chain context stresses the importance of value development process for the
forthcoming member of the chain. The main purpose of this paper is to develop a conceptual model of organizational buying
effectiveness in the supply chain context, emphasizing the importance of marketing orientation in the purchasing process.
Literature has revealed that there are many focal interaction points between relationship marketing, supply chain management,
and organizational buying. The effectiveness framework was developed regarding the value perception, organizational buying
involvement, and decentralization of decision making
Der Leser hat ein grundlegendes Verständnis darüber, worin sich Marktorientierung in der Unternehmensleitung äußert und wodurch diese gefördert werden kann.
Purpose
Despite significant investment in e-procurement by many organisations, perceived failings in the quality of such technologies and of the support provided to use them – termed here e-procurement quality – continue to generate resistance from internal customers who must assimilate e-procurement into their daily routines. Hence, the purpose of this paper is to advance the understanding of e-procurement quality from an internal customer perspective and to develop, refine, and validate construct measures.
Design/methodology/approach
Research was undertaken in the UK and the Netherlands incorporating a literature review, a qualitative study with 58 interviews, a quantitative study with 274 survey respondents, and a replication study with 154 survey respondents.
Findings
Analysis reveals that e-procurement quality comprises five universally applicable dimensions: processing, content, usability, professionalism, and training. A sixth dimension, specification, appears to be applicable, but context specific.
Originality/value
The study represents one of the most extensive investigations of e-procurement quality to date and is the first to examine its underlying dimensional structure. The multi-item scales developed and validated using a mixed-methods process are suitable for theory building and testing, as well as providing useful diagnostic value to practitioners.
Already a research is done on applying e-procurement in Iran Automaker industry and found the necessity of doing research on replacing new technology for other diligence too. Among so many industries in Iran one of the vast manufacturing cases which is familiar with e-procurement and has only 80 years history in Iran, is Cement Industry. According to special situation of world market and economy crisis there is no way for companies to work with the new technology in their enterprises to be alive in the bazaar for saving time and cost. On the other hand, sanction situation for Iran market made some difficulties for importing of raw materials for cement factories but it can be a good reason for tracking of / the applying of e-procurement in this industry as well. These two reasons, Competition and Sanction, encouraged the investigation of using of e-procurement in Iran cement manufacturing Corporation in five biggest cement companies included: 1. Qayen Cement Co. (QC), 2. Shargh Cement Co. (SHC), 3. Zarrin Cement Co., (ZC) 4. Khaf Cement Co. (KHC) 5. Sepahan Cement Co., (SC).
There is severe competition among big foreign automakers who already have best management systems as well as the minimum finished cost by using high technology. So, it is necessary for Iranian automakers to replace ancient managerial methods with newest ones. Moreover, joining to WTO which is another target of Iranian economy makes this situation clear that we have to present new methods. Eprocurement will be one of the solutions for improving competition capability in automotive industry in Iran. This research aims to explore the degree of e-procurement usage and finding benefits and limitations of applying it in five main automotive Iranian companies included: 1. Zamyad (Z), 2. Topco (T), 3. Saze Go stare SAIPA (SGS), 4. Sanaye Khodrosazi Kerman (SKK) 5. Sapco(S).
This paper describes in detail the type of value that can be associated with meaningfully involving public purchasing departments in acquisition processes for consulting services. Where this value occurred throughout the various stages of the acquisition processes examined is also described. Data were collected at five Canadian municipalities and involved a detailed examination of ten cases where the purchasing department was meaningfully involved in the acquisition process. Case study informants included five purchasing managers, ten purchasing agents, nine client department managers and a consultant. This work addresses the problem of low involvement of the public purchasing department involvement in these important purchase decisions and some significant gaps in the public procurement literature.
Purpose
The purpose of this research is to use a case‐based approach to develop an improved understanding of the conditions under which municipal purchasing departments can be meaningfully involved in acquisition processes for consulting services.
Design/methodology/approach
Data were collected at five Canadian municipalities and involved a detailed examination of ten cases where the supply function demonstrated meaningful involvement in the acquisition process.
Findings
Findings, along with organizational behavior literature on trust, were used to develop a conceptual model and tentative measurement scales that may be used to test the validity of the theory developed.
Originality/value
This work addresses the problem of low public sector purchasing department involvement in these important purchase decisions and some significant gaps in the public procurement literature.
This paper proposes and tests a set of measures to operationalize customer value in a business-to-business context. A classification of 13 drivers encapsulating the two dimensions of customer perceived value, benefit, and sacrifice is suggested which can act as the basis for the measurement of customer perceived value relevant to most business-to-business environments involving products, services, and relationships. First, the construct is circumscribed by raising five theoretical questions; then, it is conceptualized in terms of two dimensions, benefit and sacrifice, and 13 product-, service- and relationship-related drivers. Operational indicators are developed for each driver and tested with 209 organizational customers. An evaluation of the measurement properties within an analysis of covariance structure framework reveals that the operational measures developed satisfy to a high degree the criteria for unidimensionality, reliability and validity. Results suggest that 13 drivers underpin an understanding of the customer's value requirements in a business exchange.
This article presents findings from a comprehensive survey concerning internal service quality in a wide variety of U.S. companies. The objectives of this article were to further develop the internal service quality model and to study the internal customer-supplier relationships of companies with high levels of purchasing service quality. Purchasing managers were asked to assess and describe both incoming and outgoing internal service quality and associated activities for their purchasing departments and the organization as a whole. The respondents were also asked to assess the service quality provided to their firm's external customers. This information was used to summarize performance in each area for respondents with high levels of internal service quality, from both an internal supplier and internal customer perspective. Comparative information is provided for firms having low-to-moderate levels of internal service quality.
Past research in the supply chain management literature has rightfully claimed that purchasing is a strategic function of the business. In contrast, other research has found that the level of involvement by members of the supply function in strategic activities is rather low. In particular, the perception of purchasing by members of one particular group within the firm, marketing, often appears to be similar to that of a clerical function performing low-value-adding activities. Thus, a dichotomy exists regarding what is often claimed (being a strategic function of the business) and the apparent reality (little participation in strategic corporate activities; conflict with members of other organizational functions). In this article, a model predicting purchasing's strategic reputation within the firm is proposed and tested. The results, which are obtained from a survey of purchasing executives, indicate a role forback-and-forth communications and a cooperative relational history to enhance purchasing's reputation within the firm. Implications are discussed for such reputation enhancement of purchasing as a strategic, value-adding function and recommendations are made for future research.
The overall purpose of this research was to analyze internal communication patterns, service quality initiatives, supplier management strategies and internal performance in organizations providing high levels of service quality to their external customers. Data was collected from 118 purchasing executives of manufacturing and service organizations. Respondents were asked to assess external and internal service quality as well as identify a number of internal service quality-oriented activities employed in their firms. Data was summarized for respondents stating a high level of external service quality. Comparative information was also supplied for the respondents stating lower levels of external service quality.
Electronic procurement innovations (EPI) have been adopted by many firms as a means of improving their procurement efficiency and effectiveness, but little research has been conducted to determine whether the assimilation of EPI really increases procurement productivity and which factors influence its assimilation. Drawing on data from 166 firms, we conducted an exploratory study to address these questions, using cluster analysis that revealed four different clusters or patterns of EPI assimilation: none, focused niche, asymmetric, and broad-based deployment. The level of EPI assimilation was closely related to procurement productivity. Greater levels of EPI assimilation were associated with higher levels of top management support and greater IT sophistication. Also, interesting patterns emerged between the various elements of EPI infrastructure capability, specifically flexibility and comprehensiveness of standards, EPI security, and the level of EPI assimilation.
Many academics and practitioners have alluded to the importance of total quality management (TQM) principles and the important role the purchasing function plays in the quality process. However, the role of the buyer–supplier relationship in the TQM process has not been directly investigated to any large extent. Three hypotheses concerning the role of buyer–supplier relationships in the success of TQM implementation were tested. The results demonstrate that buyer–supplier relationships are different in firms with successful TQM programs. Hypothesis 1 suggests that those firms with successful TQM programs will have more formal mechanisms for interacting with suppliers. The second hypothesis suggests that business units with more successful TQM programs exhibit a greater degree of competitive focus and single sourcing. The third hypothesis relates to a higher level understanding of internal and external customer needs by successful TQM adopters. All hypotheses were supported. The buyer–supplier relationships in firms with successful TQM programs are different than firms with less successful TQM programs.
To address the question, How do you measure buyer performance?, this study produces an operationally straightforward approach for determining performance appraisal criteria for buyers. Criteria preferences captured from suppliers, internal customers of buyers, procurement managers, and buyers themselves are combined into a set of weighted performance criteria.
The approach is used in a Fortune 500 electronics manufacturer and proves to be effective and efficient in generating relevant performance criteria. While the results are specific to this organization, they provide insight into the development of a more generic set of performance appraisal criteria for buyers in any organization. Further, the approach is believed to be applicable for determining performance appraisal criteria for other knowledge workers in internal service functions of the organization.
Traditional formal reporting systems do not always do the job in effectively communicating purchasing's accomplishments. Nor are these cold, hard numbers effective in elevating the views non‐purchasing managers have of this key function.
In‐depth interviews with CEOs and major department heads in more than fifty companies, and surveys of their counterparts in nearly two hundred other firms, revealed that purchasing's performance is often assessed under a broader umbrella of evaluative factors. This article discusses the five key factors that others typically use when viewing and evaluating their company's purchasing operation.
Many firms are moving toward closer relationships with key suppliers to support total quality management (TQM) and just‐in‐time (JIT) systems. Because these systems dictate closer working relationships with suppliers, supplier evaluation systems will also undergo changes. This article focuses on these changes.
Evaluation systems under TQM/JIT must be broader in scope and oriented toward proactive problem solving and continuous improvement. They will be characterized by short‐ and long‐term improvements jointly selected by both parties.
These propositions are supported by a case study at a large corporation that successfully implemented TQM/JIT. Results indicate that the firm improved its supplier evaluation and selection process. These improvements led to increased customer satisfaction and lower costs. Improvements realized in the evaluation process were accomplished through the increased use of data, customer and supplier input, and feedback from the purchaser. Finally, the case study reviews the broader evaluation measures used in a TQM/JIT system.
This article provides a systematic review of the purchasing strategy literature over the past 30 years. It identifies gaps in the body of research and makes recommendations for future research. The basic managerial problem is that the purchasing function has the ability to influence corporate profitability only when it is operating at a strategic level in the firm. The evolution of the function has been slow; therefore, the contribution the purchasing function can make has yet to achieve its maximum level in many firms.
The study reveals that much of the research completed in this area is either conceptual in nature or is based on a small number of case studies. While some studies do base their findings on data gathered from a large number of firms, most do not report the use of statistical analysis to support the findings of the research.