Purchasing process transformation: restructuring for small purchases

    Authors

    M. A. Parikh;K. Joshi

    Comments

    Authors: contact us about adding a copy of your work at STARS@ucf.edu

    Abbreviated Journal Title

    Int. J. Oper. Prod. Manage.

    Keywords

    purchasing; organizational change; process management; EMERGENT CHANGE; SUPPLIER; BPR; IMPLEMENTATION; PERSPECTIVE; PROGRAMS; USERS; Management

    Abstract

    Purpose - Reducing purchasing costs remains an ongoing concern for most organizations. The standard purchasing process that works well for large purchases, however, generates proportionately much higher overhead and administrative costs for small purchases leading to purchase delays, high error rate, and poor vendor participation. There is a need to develop separate purchasing processes for small and large purchases and evaluate underlying factors that affect such process transformation. This paper aims to analyze a successful purchasing process transformation conducted at a utility company for small purchases. Design/methodology/approach - It uses a case study methodology to examine the transformation in detail and understand related issues such as benefits realization, resistance to change, and risk management involved in such transformation projects. Findings - It compares original and transformed purchasing processes and identifies resultant benefits to the company, participating vendors, banks, and employees. It finds that a company receives many operational, informational, and accounting benefits in addition to purchasing cost savings. Practical implications - It provides guidelines for similar restructuring for small purchases in other organizations. Originality/value - The paper offers a generic business process model for small purchases and employs equity-implementation model to explain the factors leading to the success in this purchasing process transformation and possibly other similar organizational transformations.

    Journal Title

    International Journal of Operations & Production Management

    Volume

    25

    Issue/Number

    11

    Publication Date

    1-1-2005

    Document Type

    Article

    Language

    English

    First Page

    1042

    Last Page

    1061

    WOS Identifier

    WOS:000234367200002

    ISSN

    0144-3577

    Share

    COinS