Purchasing And Supply Management Research Articles

Change within purchasing and supply management organisations – Assessing the claims from maturity models

It is a wide-held assumption that professional development and change within purchasing and supply management (PSM) organisations can be explained and guided by a maturity model. In this paper the guidance which the maturity model concept offers to understand a PSM organisation's performance is assessed. The methodology is based on the outcomes of a literature review of PSM maturity models, development of an organisational change framework and the learning from three qualitative case studies. An alternative understanding of the development of the PSM organisation is offered through an organisational change framework, composing 1) movement transitions, 2) scalability of change, 3) acceptability of change, and 4) the substantive element of change. The research found that extant PSM maturity models are too rigid for PSM managers to apply, and although maturity models are commonly accepted in PSM literature, in practice, they may produce the opposite effect of what is promised. The PSM maturity models suggest that their application will lead to increased status and influence of PSM within the organisation; expectations that may not be met. PSM organisations’ change processes are subjected to a range of situational and contextual power relations which must be considered in order to advance the specific PSM organisation roles and responsibilities.

Conducting multilevel studies in purchasing and supply management research

Purchasing and supply management (PSM) research commonly covers multiple levels of theory and analysis. The theorizing and simultaneous testing of hypotheses across multiple levels is referred to as multilevel analysis (MLA) and is commonly performed using hierarchical linear modeling (HLM). Researchers in the PSM domain have paid little attention thus far to the topic of multilevel studies. Although MLA holds the potential to yield novel insights into PSM issues, it also generates new challenges for authors and reviewers alike. We contribute to this methodological dialogue by examining reasons for conducting multilevel PSM research and offering practical guidance for increasing its methodological rigor.

Evolving Purchasing and Supply Organizations: A contingency model for structural alternatives

Purchasing and Supply Management (PSM) is under significant pressure to find levers to further increase its contribution to corporate goals. In order to improve performance in line with expectations, Purchasing and Supply Organizations (PSOs) have to evolve continuously. To help address this challenge, a comprehensive contingency framework of PSO structures is presented. The framework is based on existing literature on PSO contingency factors as well as analysis of two case companies. The findings highlight the importance of taking a contingency perspective for understanding the PSO and combining a detailed view of macro-level structural dimensions with micro-level characteristics. These macro-level dimensions comprise category, business unit, geography and activity. The micro-level characteristics comprise centralization, formalization, specialization, participation and standardization. From a theoretical perspective, the contingency framework opens up insights that can be leveraged in future studies in the fields of hybrid PSOs, global sourcing organizations, and International Purchasing Offices (IPOs). From a practical standpoint, an assessment of external and internal contingencies and their relation to specific structural dimensions and characteristics provides the opportunity for more consciously evolving the PSO to continue to improve PSM's contribution.

Managing distance in international purchasing and supply: a systematic review of literature from the resource-based view perspective

The aim of this research is to find out how the extant literature on international purchasing and supply management (PSM) covers the elements of capability from the perspective of distance. A priori, we form a framework of capability driving elements and conclude that distance—in its multiple dimensions—is the fundamental management aspect in international PSM. Equipped with analytical frameworks and a bottom–up process for identifying emergent themes, a systematic literature review was conducted on a representative sample of scholarly literature on international PSM, using the NVivo analysis software and a data display as tools. We identify several capability relevant themes from the literature, and provide a distance-based a posteriori conceptualisation of international PSM, founded in the information processing theory, with the source-user, user-user and source-source distance types driving the information processing requirements, and loading avoidance, policy-based and enhancement mechanisms determining the information processing capacity.

The effect of external supply knowledge acquisition, development activities and organizational status on the supply performance of SMEs

Given the increasingly strategic role of external resources, acquiring knowledge about current suppliers and the broader supply market is an important and demanding task for the purchasing and supply management (PSM) function of a firm. Performance-improvement-oriented application of external supply knowledge present further challenges for the function. To examine this, we draw on the knowledge-based view and develop a hypothesized model in which supply knowledge acquisition drives PSM exploration and exploitation orientations which in turn mediate the organizational status of PSM function in terms of supply performance. We test the model on an SME-focused and survey-based dataset, using structural equation modelling. Our results indicate that an exploitative orientation is associated with knowledge gained from the supply base, whereas an explorative orientation is predominantly associated with supply market knowledge and less with supply base knowledge, suggesting natural pairings. The findings also show how an exploitative development orientation mediates the positive association of the PSM function's organizational status with supply performance. Driven by supply base knowledge, a status-empowered exploitative PSM orientation may suppress supply market based explorative orientation in resource-scarce SMEs, thus appearing to serve as the sole path to supply performance. Our research contributes by pointing out the significance of the knowledge-resource, and the knowledge-based view, in understanding performance in PSM.

Achieving efficiency and effectiveness in Purchasing and Supply Management: Organization design and outsourcing

As a function with a strategic role, Purchasing and Supply Management (PSM) needs to continuously find ways to improve its efficiency and effectiveness. One potential way to specifically addressing efficiency targets is to outsource parts of the purchasing process. While outsourcing remains one of the most prevalent business practices in various areas, many businesses fail to realize the benefits anticipated from their outsourcing initiatives. Research reports that one major reason for these outsourcing challenges lies in the design of the focal organization. In this paper, we take an organization design view to outsourcing in the PSM context. Based on a multi-year case study from 2010 to 2013 at a global chemical and pharmaceutical company, we elaborate how the organizational design of the PSM function relates to outsourcing opportunities in order to increase efficiency and effectiveness by allocating internal resources to more value-adding activities. The case illustrates how an activity-based organizational design of PSM can support outsourcing of some parts of the purchasing process.

Accounting Theory: Review of Theory in Purchasing and Inventory Management

Separate classification and measurement of inventories and purchasing effort of an organisation are necessary because of their significance as a basic resource of many firms and because the basis of valuation of inventories has a direct effect on the reported income and the cash flow presentations. Similarly, an evaluation of current and suggested measurement procedures should take into consideration the basic nature of inventories in relationship to the firm’s operations, and the objectives and basic concepts as relating to accounting. In step with the changes in firms’ competitive environments, the purchasing function is receiving increasing attention from managers and researchers alike. Through the past decades, the purchasing and supply management (PSM) literature has shifted towards a more strategic focus. This paper discusses the concepts and theories underpinning the purchasing and inventory management in relation to the theory of creation/invincible hand and its importance in accounting theory. Contents analysis was adopted for this study by reviewing the available literature in this field. It was discovered that theory is the backbone that shape practice in purchasing/supply chain and inventory management.

Strategy alignment in purchasing and supply management: a systematic literature review and research framework on the performance impact

This paper studies the performance impact of multi-dimensional strategy alignment in purchasing and supply management (PSM) in a literature review (LR)-based analysis. In a first step, it evaluates the scientific state-of-the-art in a systematic LR by classifying, analysing and synthesising 29 empirical studies with reference to a conceptual framework and based on the methodologies used in the sampled papers. The results of the review indicate that coordinating purchasing strategies with: 1) goals and strategies at the corporate level; 2) other functional strategies; 3) the supplier base (and the corresponding contextual requirements) has a significant positive effect on performance. Building on the conceptual framework, we highlight managerial insights and develop a research agenda by identifying research gaps and pointing out methodological shortcomings of the sampled papers in a second step. Finally, we operationalise an integrated strategy alignment index and develop hypotheses that support future empirical research on holistic strategy alignment in PSM.

Strategy alignment in purchasing and supply management: a systematic literature review and research framework on the performance impact

This paper studies the performance impact of multi-dimensional strategy alignment in purchasing and supply management (PSM) in a literature review (LR)-based analysis. In a first step, it evaluates the scientific state-of-the-art in a systematic LR by classifying, analysing and synthesising 29 empirical studies with reference to a conceptual framework and based on the methodologies used in the sampled papers. The results of the review indicate that coordinating purchasing strategies with: 1) goals and strategies at the corporate level; 2) other functional strategies; 3) the supplier base (and the corresponding contextual requirements) has a significant positive effect on performance. Building on the conceptual framework, we highlight managerial insights and develop a research agenda by identifying research gaps and pointing out methodological shortcomings of the sampled papers in a second step. Finally, we operationalise an integrated strategy alignment index and develop hypotheses that support future empirical research on holistic strategy alignment in PSM.

Mediation effects in the ‘purchasing and supply management (PSM) practice–performance link’: Findings from a meta-analytical structural equation model

Firm value chains have developed into global disaggregated supply chains. As a result, purchasing and supply management (PSM) has long been recognized as a strategic function capable of contributing to superior firm performance and ultimately to (sustained) competitive advantage. Still, empirical evidence of the ‘PSM practice–performance link’ is widely scattered, which leads to a limited understanding of the interplay of different PSM practices en route to buying firm performance. Based on a systematic summary of 99 independent empirical studies in meta-analytical structural equation modeling, we test alternative models of the ‘PSM practice–performance link’, thereby demonstrating how their effect is mediated.Grounded in resource-based theories, our results indicate that internal PSM practices fully mediate the effect of relational and transactional supplier-facing PSM practices on operational performance. Still, relational supplier-facing PSM practices directly affect business performance, while transactional practices’ effect is fully-mediated. Furthermore, operational performance serves as a full mediator for the relationships between internal PSM practices on market and financial performance and the effect of operational performance on financial performance is partially mediated via market performance. Finally, we discuss the implications of our study from a practical, theoretical, and methodological perspective.

A processual analysis of the purchasing and supply organization in transition: the impact of offshoring

Many companies have resorted to offshoring in order to reduce costs and grow their global market presence. Yet it remains unclear what impact the offshoring strategy has on the purchasing and supply organization (PSO) of these companies. In this paper the nature and type of changes offshoring organizations make within the PSO are examined, i.e. how new purchasing and supply management (PSM) structures and practices emerge, are maintained or are discarded as production operations are relocated. The processual perspective is used to analyze empirical data from a rich, in-depth case study within a global engineering company. Results suggest that in line with the law of requisite variety the PSO changes thoroughly when the company relocates its production activities through the captive offshoring mode, but does so in a more disjointed and non-linear manner than the current stage models would suggest. The offshoring process provides momentum for PSO change and influences where and how the change happens. We present five propositions for further research and conclude that offshoring provides managers with opportunities to: (i) change and influence the strategic direction of PSM in their organizations, and (ii) build viable strategies of retaining and managing knowledge and PSM competencies in global operations.

Purchasing and supply management and the role of supplier interfaces

Purpose – The purpose of this paper is to provide an historical account of the evolution of the purchasing and supply management (PSM) field from the perspective of resource interfaces between buying firms and their suppliers. This historical account is then used as a platform to develop a framework for understanding of the capabilities required to manage a cluster of resource interfaces. Design/methodology/approach – The paper uses an historical survey of practices and ideas in the PSM field to develop a theoretical argument on capabilities to manage resource interfaces between buying firms and their suppliers. Findings – The paper proposes a framework linking learning, interactive capacity and interactive capability as they evolve through the interplay between resource interface type, organizing principle and technology strategy. Research limitations/implications – This paper contributes a conceptual framework focussing on the capabilities that underpin the management of individual resource interfaces. Practical implications – The paper offers the following practical implications: first, the firm needs to consider what type of interface applies in the relationships with its suppliers: second, the firm needs to consider its technological strategy in light of its current supplier interfaces and organizing principles: third, the internal as well as external organizing needs to be aligned with what the firm proposes to achieve from its supplier relationships and be congruent with the interfaces deployed to manage those relationships: fourth, interacting with suppliers is a matter of learning regarding the outcomes of the interaction as well developing interactive capacities and capabilities. Originality/value – The paper provides a first attempt to go beyond the characterization of individual resource interfaces in buyer-supplier relationships, to look at the capabilities required to manage multiple resource interfaces and the dynamics underpinning paths of development for those capabilities.

The character and significance of Nordic purchasing and supply management research: A systematic review of the literature

This paper evaluates the character and significance of Nordic contributions to purchasing and supply management (PSM) research. The paper is based on a systematic analysis of the literature, focusing on the contributions of authors with a Nordic affiliation to PSM. We seek to identify the themes in focus of Nordic PSM research, the research methods and theories that are typically employed; ultimately we discuss if a Nordic PSM school of thought or approach can be discerned and evaluate if or in which areas Nordic PSM research has made significant impact. We conclude the paper by outlining and discussing important future avenues of research for Nordic research in PSM.

Assessing the use of External Grand Theories in Purchasing and Supply Management research

The paper examines the extant management literature on Purchasing and Supply Management (PSM) to assess the underpinning role of External Grand Theories (EGTs) – i.e., established theories drawn from other areas of economics, management and other social sciences. We perform an extensive and systematic literature review of 1055 papers in the 20 top management journals for the time period 2002–2010, bypassing a keyword search in favour of a complete scanning of a total of 14,943 articles. Results show an analysis and classification of the most commonly used EGTs borrowed to underpin research on PSM. We also match research topics, methodologies and unit of analysis with EGTs. Finally, we investigate what is the nature of the research – exploratory, theory building and theory testing – supported by EGTs. Analyses find PSM to be poorly rooted in EGTs, which confirms PSM relatively lower theoretical maturity when compared with other disciplines. Transaction Cost Economics and the Resource Based View prove to be the most frequently adopted frameworks. Other theories emerge as interesting opportunities in combination with specific topics and methodologies.

A Meta‐Analysis of the “Purchasing and Supply Management Practice–Performance Link”

Resource‐based theory (RBT) suggests that purchasing and supply management (PSM) practices can help buying firms enhance their performance. Consequently, the “PSM practice–performance link” has undergone intense empirical investigation over the last two decades. Although most studies report a positive relationship between PSM practices and firm performance, it remains unclear whether and to what extent PSM practices relate to performance. We assess the empirical literature by conducting a meta‐analysis of 99 PSM studies from an RBT perspective. Our results indicate strong support for the positive relationships among PSM practices and firm performance. Our findings contribute to the literature by underlining the relevance of PSM, identifying aspects of the PSM function that can be considered “strategic” and detecting areas that require additional empirical investigation. Our research also provides guidance to managers as to which PSM practices demonstrate the strongest potential for contributing to buying firm performance.

The Future of Purchasing and Supply Management Research: About Relevance and Rigor

The Journal of Supply Chain Management (JSCM) is a hallmark in the academic field of operations and supply chain management. During the past 50 years, it has contributed substantially to the recognition and adoption of purchasing and supply management (PSM) as an academic and strategic business domain. Having been invited by the JSCM editors to provide some ideas on the future directions of PSM research, the authors discuss what can be done to further increase both its relevance and rigor. Rigor and relevance in academic research are interconnected. To improve its relevance, the authors argue that future PSM research should better reflect the strategic priorities raised in the contemporary strategic management literature. Next, future PSM research should be much better embedded in a limited number of management theories. Here, stakeholder theory, network theory, the resource‐based view of the firm, dynamic capabilities theory, and the relational view could be considered as interesting candidates. Rigor is connected with robustness of academic research designs and projects. To foster its rigor, future PSM research should allow for an increase in the number of replication studies, longitudinal studies, and meta‐analytical studies. Future PSM research designs should reflect a careful distinction between informants and respondents and a careful sample selection. When discussing the results of quantitative studies, future PSM research should report on effect sizes and confidence intervals, rather than p‐values. Adoption of these ideas would have some important implications for both the academic PSM community and academic journal editors.

Cross‐functional integration and functional coordination in purchasing and supply management

PurposeThe purpose of this paper is to develop a set of nine hypotheses linking four purchasing and supply management (PSM) practices directly to purchasing performance and indirectly to financial performance.Design/methodology/approachThe authors collected data in a global cross‐industry survey of 148 companies, combining primary interview and survey data with secondary data on firm performance, in order to minimize the impact of common method variance.FindingsSupport was found for eight of the nine hypotheses. In particular, a positive impact was found of cross‐functional integration and functional coordination on purchasing performance, and of purchasing performance on firm performance. Both talent management and performance management have a positive impact on cross‐functional integration and functional coordination. Talent management also has a direct impact on purchasing performance, in contrast to performance management.Originality/valueThe association of enhanced PSM maturity levels with financial performance metrics collected from secondary data sources provides robust empirical support for the stated but to this point largely untested positive impact of PSMmaturity on the firm's competitive position.

Past, present and future trends of purchasing and supply management: An extensive literature review

This research aims to evaluate the state of the art of Purchasing and Supply Management (PSM). This is carried out through a wide, in-depth, and structured examination of published works. More than one thousand papers (i.e., 1055) published in 20 peer-reviewed journals were collected and analyzed to provide a snapshot of PSM research, including the extent of the overall production, the background theory used, the unit of analysis, the research method, and the main topics investigated. Other literature reviews related to PSM have been conducted in the past but have focused primarily on specific topics and/or considering a narrower set of publications. Furthermore, the authors define a framework useful for analyzing the PSM literature and outline the state of the art of PSM research from a content-specific perspective, including an evaluation of the maturity of PSM research as a discipline.

Research opportunities in purchasing and supply management

Purchasing and supply management (PSM) are crucial for the effective and efficient operation of manufacturing firms, now more than ever. The PSM function has evolved from being routine and mechanical to a function that can deliver true competitive advantage. The trend toward increased globalisation and outsourcing, along with a focus on innovation- and capability-driven supply management, has led to an increased reliance on suppliers. This has significantly enhanced the importance of PSM for manufacturing companies. The heightened significance in practice has been paralleled by an increasing attention of researchers in developing theories and chronicling best practices. At the same time, the rapid rate of change represents both daunting challenges and exciting opportunities for research in PSM. It is the goal of this article to highlight such challenges and discuss ensuing opportunities in PSM research. This objective is accomplished via the nominal group technique involving a panel of leading scholars in the purchasing and supply management field. As such, the article presents a synthesis and discussion of important research themes, poses a set of intriguing research opportunities, and serves as a motivation for future investigation.

Maximizing impact of investments into purchasing and supply management

PurposeThe purpose of this paper is to empirically evaluate the effect of resources and capabilities in purchasing and supply management (PSM) on operational performance. Specifically, to examine whether managers who neglect investments into key knowledge‐driven PSM resources will be foregoing the opportunity for a higher performance return from their core supplier‐related capabilities.Design/methodology/approachBased on an international cross‐industry survey of 273 major companies, two conceptual models grounded in the resource‐based view (RBV) theory are analyzed for moderation and mediation effects, and provide both researchers and practitioners with means of determining targets for investment prioritization. The models are tested using multiple regression techniques and structural equation modeling.FindingsThe authors' findings suggest that the impact of supply base practices on operational performance is stronger in firms where more advanced PSM resources are deployed; and that these improvements can be explained by a higher leverage of supply base practices on advanced PSM resources.Research limitations/implicationsThe paper documents the combined positive effect of knowledge‐driven resources and supplier‐related capabilities on operational performance. Additional resources and capabilities, e.g. PSM integration, deserve further research. A longitudinal survey of relationships would help us to gain a better understanding of sequential relationships between the examined constructs.Practical implicationsThis paper will help to guide senior management in balancing investment decisions for PSM development. The applied measurement model can be used to identify specific potential of improvement in individual organizations that can lead to increased operational performance.Originality/valueThe simultaneous consideration of moderation and mediation based on the RBV's conceptualization of resources versus capabilities provided a contribution in PSM. The results support management in maximizing the return of investments into PSM.