THE RELATIONSHIP BETWEEN PURCHASING AND SUPPLY MANAGEMENT

Introduction

Increased strategic outsourcing and growing expenditures on purchased materials require that enterprises effectively manage inter-enterprise cost management programs such as total cost of ownership (TCO), supplier cost structure analysis, and target costing. Management's ability to control cost is critical to the organization's financial success. Because purchases from supplier organizations are the largest single expenditure for most firms (Nelson, Moody, and Stegner 2001 ), the ability to effectively manage and reduce costs can result in valuable, non-transferable, and nonimitable human and knowledge resources than can provide a significant competitive advantage for companies. Purchasing and Supply Management (PSM) generally has the greatest degree of supplier contact, particularly related to supplier pricing and cost management; therefore, PSM is the logical leader of the organization's supplier cost management efforts. Three activities that PSM may employ to manage costs are total cost of ownership analysis (Ellram 1994; Ellram and Siferd 1998), supplier cost structure analysis (Ellram 1996; Newman and McKeller 1995), and target costing (Ansari and Bell 1997; Cooper and Slagmulder 1999).

PSM's engagement in strategic cost management activities does not occur in isolation (Ellram et al. 2002). Rather, the ability for PSM to proactively engage in strategic cost management activities may depend on several factors. From a Resource Based View (RBV) of the firm, it is argued that the way PSM believes that it is perceived within the firm affects the extent to which PSM engages in TCO analysis, supplier cost structure analysis, and target costing. The perceptual PSM characteristics examined in this research consist of PSM's view of its value in the organization, as defined by: 1) the perceived importance of PSM by top management and peer corporate functional areas; 2) the degree to which PSM is accountable for achieving specific, measurable goals; and 3) the strategic integration of PSM within its own firm.

This article is organized as follows. First, the relevant literature is reviewed and the Purchasing are introduced. The research method is described next, followed by an analysis of the data. The research findings and their managerial implications are discussed. Research limitations and conclusions are then provided.  برای دریافت ادامه مطلب با ما تماس بگیرید