Purchasing Professionals' Perceived Differences between Purchasing Materials and Purchasing Services

Abstract

SUMMARY This research addresses a gap in the current literature by examining the differences between the process of purchasing services and the process of purchasing materials. Four hypotheses concerning the possible differences were developed based on a review of the relevant literature. These hypotheses were then tested using qualitative focus studies and a quantitative survey involving 82 purchasing managers with an average of 9.8 years' purchasing experience. Also, 14 interviews were conducted with purchasing executives to gain a better understanding of perceived differences. The results indicate that perceived differences exist between the processes of purchasing services and purchasing materials, especially in terms of the complexity of these processes. These perceived differences vary by the number of years of purchasing experience and the type of purchasing experience (services versus materials). Fifteen individual process steps were examined to determine the exact nature of the differences between these two processes. Managerial and research implications are discussed throughout the article.

Business service sourcing: a literature review and agenda for future research

“…One article (Sink and Langley, 1997) used a combination of survey, case study and a focus group. Smeltzer and Ogden (2002) combined a focus group study with a survey.…”

Purchasing manages and optimises existing product variance

“…One important approach of cost optimisation across the procurement chain is the elimination of waste in form of reduction of unnecessary product variants (Douglas et al, 2015;Christopher, 2005;Droege, 1999;Liker, 2004, Wang et al, 2011. In parallel, companies increasingly rely on externally supplied services and products, which often account for more than half of the company's spend (Schiele, 2007;Bals et al, 2009;Cox et al, 2005;Smeltzer and Ogden, 2002). The purchasing department has a very high impact on the costs of the product (Carr and Pearson, 2002) and the variance of these purchased parts.…”

Localization of Material Supply: A Literature Review

“…Taking the issue more broadly, according to theoretical propositions, purchasing service is more complex than purchasing materials and this complexity exists because of the risk involvement of purchasing activities (Smeltzer and Ogden, 2002;West, 1997;Gould, 1989). Location of the supplier has importance considering if a company uses Just-in-time manufacturing system.…”