ABSTRACTEnvironmental purchasing consists of the purchasing function's involvement in activities that include reduction, recycling, reuse, and substitution of materials. Despite the potentially important role that the purchasing function can play in a firm's environmental activities, little research has been performed to date that examines the factors that impact environmental purchasing. The authors develop and empirically test a theoretical model that examines how interorganizational factors both drive and constrain purchasing's involvement in environmental activities. The empirical findings suggest that environmental purchasing activities will be facilitated through increased coordination with suppliers as well as downstream members of the supply chain, including retailers. The results also suggest the need for increased coordination within the firm, particularly between the purchasing function on the inbound side and marketing and distribution functions on the outbound side.
Examines the interorganizational alliance of a buyer and supplier with the expressed objective of improving the quality of existing purchased parts. Supplier quality can be improved through the implementation of various programmes such as statistical process control (SPC). Supplier quality improvement is viewed as two‐dimensional; there may be improvement owing to the modification of product designs or to implementation of process analysis techniques such as SPC. Examines the relative importance of each dimension of supplier quality improvement. The potential for improvement caused by each type of activity has significant organizational and resource allocation implications for both buyer and supplier.
ABSTRACTThis paper examines the critical interface between manufacturing, purchasing, and quality assurance by exploring the impact of two alternative structures of buyer and vendor communication on attempts to improve the quality of purchased items. Those two structures of communication are the parallel structure and the serial structure. The research analyzes and compares the advantages and disadvantages of these two specific communication structures; the results have implications for both researchers and managers. The analysis of data suggests that the parallel structure is associated with significantly higher levels of quality than the serial structure. From a managerial perspective, the results of the research suggest that manufacturers must consider the parallel communication structure as a viable alternative for improving the quality of purchased components. While this study has helped frame some key managerial issues, the need and opportunity for further research in related areas is delineated.
PurposeThere is good evidence that the shift in global sourcing is toward so‐called "low cost country suppliers." Yet conditions in these countries are often not well‐known. At the same time, best practices in integrated supply dictate a multi‐faceted decision, rather than basing supplier location on a single attribute say, labor cost alone. With these issues in mind, a research project was formulated with two primary objectives. First, the authors wanted to compile the knowledge and perceptions of purchasing managers regarding low cost regions and their capabilities and to reflect the multiple factors involved in current sourcing strategies and supplier selection decisions in these low cost geographies. Second, the authors wanted to compare managers' subjective perceptions with objective data regarding attributes of sourcing locations to identify the relationship between perceptions and reality. This paper aims to explore the issues.Design/methodology/approachThe authors surveyed over 100 sourcing professionals on their perceptions of various low cost sourcing alternatives. Perceptual mapping techniques were used to combine the rankings on some 12 different attributes to visualize how the various attributes relate to each other and how the low cost regions compare when rated against sourcing managers' ideal perceptions.FindingsThe research results show that procurement managers select regions for low cost sourcing based on both specific measures and individual and/or group perceptions of the region, whether these perceptions are correct or not. This paper probes these perceptions. Also the paper compares these subjective perceptions with objective data to show that cultural stereotypes may bias managers' perception of location‐specific characteristics. The paper closes with implications for procurement managers and opportunities for further research.Practical implicationsThe authors have demonstrated that purchasing managers choose sourcing locations using multiple criteria instead of only focusing on cost. But some perceptions are biased by cultural stereotypes and do not reflect reality. This suggests that managers have to be careful when using their subjective judgment in choosing sourcing locations.Originality/valueThe authors believe that visual representations of alternative sourcing options have great potential to improve the efficiency of cross‐disciplinary and multi‐company teams that are increasingly responsible for global sourcing strategies. Comparing managers' perception with objective data of location attributes shows that mangers' perception may be biased by cultural stereotypes.
ABSTRACTRussell and Krajewski presented an optimal purchase order quantity algorithm that considered the effect of the transportation rate structure for less‐than‐truckload (LTL) shipments. The authors applied the Russell and Krajewski algorithm to a variety of freight classes and lengths‐of‐haul. Anomalous cases were found in which the freight rate schedule, when used with the suggested algorithm, resulted in incorrect order size decisions. In this comment, the authors consider the impact of these anomalies on the optimal order quantity and associated total costs. A procedure is presented to adjust the Russell and Krajewski algorithm to arrive at the optimal purchase order quantity and the lowest total annual cost.
Examines the cost performance of various strategies for managing foreign exchange risk in international sourcing. The strategies represent a broad spectrum of approaches to exchange risk, ranging from naïve to active. Of particular interest is the comparison of those strategies which use exchange rate forecasts with those which do not. Focuses on movements in the German mark/US dollar exchange rate for the period January 1986 through December 1990. Employs a historical simulation methodology to compare the performance of various strategies over this time frame. The results suggest that active approaches to exchange rate management warrant further attention.
PurposeThe purpose of this paper is to summarize the current thinking on intermediation and disintermediation, extract candidate drivers for this cycle, capture the expert opinions on what is driving the cycle and determine the quantitative and qualitative conclusions related to the electronics industry supply network integration and requirements for its success.Design/methodology/approachA series of one‐on‐one expert interviews were conducted to establish the validity of the initial list of drivers and to add to this list based upon their expert knowledge. A web‐based survey followed with the purpose of validating the final dimensions list and assessing the various alternative value propositions that intermediaries should be considering. Finally, a Delphi exercise concluded this research thrust by convening experts in the electronics supply network for a one‐day review of the results and a distillation of the results into expert forecasts of directions and trends.FindingsAny supply chain intermediary must achieve "Operational Excellence" in their chosen field of endeavor for them to remain competitive in the electronics industry. But this condition is a necessary but not sufficient predictor of business success. The intermediary service "Bundles" bring more value than individual cash flow, material flow, information flow or knowledge flow alone. And unbundling one flow from the others does not seem to provide a successful disintermediation platform.Practical implicationsThe paper provides electronics industry firms an assessment of the fundamental conclusions that must be addressed for this industry to better withstand another industry downturn than it did in the previous recessionary period (2001‐2002).Originality/valueThis paper documents the first triangulated research project where knowledgeable experts within the electronics industry supply network were polled to determine the fundamental drivers for the intermediation/disintermediation cycle present in the electronics industry today.
Purchasing organizations are exposed to risk in their interactions with suppliers, whether it is recognized and managed, addressed in a cursory manner, or altogether ignored. In order to understand the supply risk that exists, purchasing organizations can proactively assess the probability and impact of supply risk in advance, or reactively discover risk after a detrimental event occurs. The purpose of this study is to explore, analyze, and derive common themes on supply risk assessment techniques. Findings from this research indicate that purchasing organizations can assess supply risk with techniques that focus on addressing supplier quality issues, improving supplier processes, and reducing the likelihood of supply disruptions. From an agency theory perspective, these risk assessment techniques facilitate the obtaining of information by purchasing organizations to verify supplier behaviors, promoting goal congruence between buying and selling firms, and reducing outcome uncertainty associated with inbound supply.
