Creating a Decision-Making Tool for Strategic Purchasing. A case study of SKF

Abstract

The purchasing function has for the past decades been subject to forces shifting the internal strategic balance in its favor. Earlier having been seen as no more than a support function, the purchasing departments today carry a crucial role in realizing the overall corporate strategy. While organizations have adapted to the increased complexity of global sourcing, there still exist conceptual underdevelopment regarding how to decide the approach towards purchasing. Where the scope for supplier relationships ranges from short- to long-term, this thesis investigate an approach that falls in the middle - namely strategic purchasing. The purpose of this thesis was to develop a tool for organizations to evaluate characteristics of their purchases, which then would guide towards choosing the right purchasing approach. By doing a case study of SKF and conducting 21 semi-structured interviews, the thesis contributes in two major ways. First, the theoretical definition of strategic purchasing was compared to real-life practice, improving the concept’s empirical accuracy. Second, a multitheoretical approach was adopted to develop a framework identifying potential for strategic purchasing. The findings show how strategic purchasing deviates from theory in that a longterm focus can be achieved without committing to supplier relations. Further, the findings specify that Strategic Importance, Supply Complexity, Customization, Supply Market Volatility and Technological Uncertainty are five dimensions of characteristics that should be evaluated to provide guidance for the purchasing department. Last, a call for further research into the role of social capital as well as the measurability of the proposed framework is given.