Organising is the key to efficient purchasing

Aug 19, 2014 by Annica Eijlinder

A well-functioning purchasing organisation is a powerful tool for companies. Chalmers researcher Ingrid Hessel shows in her thesis that internal purchasing operations affects and is affected by relationships with suppliers and that cooperation can cut costs and also create added value that is about more than just price. Coordination between several departments with different roles in the purchasing process creates the basis for dealing with standardisation as well as specific requirements.

When Ingrid Hessel presents her thesis, the focus is on purchasing. Ingrid has focused on the way purchasing operations can be made more efficient by improving the organising of the purchasing function. The results of her research show that the way purchases are organised internally affects the relationships with suppliers and that cooperation with suppliers can cut costs and also create other values than, for example, just a low price.

"It is about connecting two separate ways of thinking," Ingrid explains, "one about the internal organising of the companies and one about dealing with supplier relationships. I have tried to integrate the two ways of thinking as I have seen a need for it but, above all, because such a connection has been requested by other researchers in the field."

Well-functioning organising is the most powerful solution

Ingrid's research brings out the advantages of dealing with these two areas at the same time instead of considering them as separate issues.

"Reorganising was needed to improve the purchasing efficiency in the company I studied. In turn, this led to an opportunity to reduce the costs of managing and maintaining one of the purchased systems by between 50 and 70 %. Another advantage is that the reorganisation increased cooperation with suppliers, which has also led to product development and thereby increased sales for the buyer. The effects are not as direct as, for example, reducing the number of suppliers or coordinating purchasing volumes to save money – however, a well-functioning purchasing organisation is a very powerful and long-term solution," Ingrid says.

Different roles need to work together

Ingrid's study includes 86 interviews with people who work in a buying company, for their suppliers and at the buyer's customers. The interview material has been supplemented by visits to four factories in buyer as well as supplier companies, where Ingrid has been able to study production processes and also see how buyers and suppliers interact with each other. Ingrid has also had the opportunity to use data from different internal IT systems.

"In my conclusions, I emphasise four departments – purchasing, , product management and project management – and the roles they play when it comes to the organising of purchasing operations. Product development is often about specifications and is a technical role, while product management and project management can be seen as polar opposites. Project management looks specifically at more short-term projects with a clear focus on a certain customer, while product management has a longer perspective and strives for products that can suit many. Structured coordination between departments affects the opportunities to standardise and coordinate purchases but also provides an opportunity to adapt to specific customer requirements," Ingrid claims.

The interest in purchasing was awakened early on

Ingrid became interested in the area already during her Master's thesis. She then studied change management aimed at purchasing strategies. It awakened her interest in how the internal purchasing operations affect and are affected by relationships with suppliers.

"When I was then asked to become a doctoral candidate, I saw it as a perfect opportunity to study the area further. So, I built on my study in my Master's thesis but with a slightly different focus," Ingrid explains.

After the doctoral studies, the plan is to convert the knowledge into practice. Ingrid is curious to find out how she can contribute her knowledge in industry and also hopes for her part that the practical experience can give her new insights.

Explore further: Study suggests integrating purchasing, logistics yields better business results

More information: The dissertation is available online:… xt/197258/197258.pdf

Related Stories

Are buyers born or made?

Feb 28, 2012

(Medical Xpress) -- Are people drawn to a career in purchasing because of their skills or their aptitude? Which is the most important trait for a buyer: emotional intelligence or IQ?

Recommended for you

Study finds assisted housing works, but it could be improved

14 minutes ago

Two researchers from the University of Kansas Department of Urban Planning have just completed a study on the locations of assisted housing units and assisted households across the nation. It examines one of the key issues ...

Economist probes the high cost of health care

Mar 27, 2015

When Zack Cooper arrived at Yale as assistant professor of public health and economics, he gained access to a first-of-its-kind dataset. Working with the non-profit Health Care Cost Institute, Cooper and ...

Cash remains king in Chile but its days could be numbered

Mar 26, 2015

For more than a year now, Chileans have endured a crisis of cash access. Despite global moves toward new forms of payment such as contactless and mobile transfers, the crisis in Chile highlights the continuing ...

Will you ever pay off your student loan?

Mar 25, 2015

Would-be participants of higher education must be given full and transparent advice before they accumulate debts as students that follow them into the workplace, according to a report published in the International Journal of ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.