Purchasing EBM037A05 Lecture Notes + Summary of Mandatory Readings
Week 1
Introduction to the key elements in purchasing
ARTICLE
Mogre, R., Lindgreen, A. & Hingley, M. (2017) Tracing the evolution of purchasing
research: future trends and directions for purchasing practices, Journal of
Business & Industrial Marketing, Vol.32 No.2, pp.251-257.
Week 2
Purchasing as a strategic function
ARTICLE
Luzzini, D. & Ronchi, S. (2011) Organizing the purchasing department for
innovation, Operations Management Research, Vol. 4 No.1, pp. 14-27.
Week 3
Implementing the purchasing strategy
ARTICLE
Ateş, M.A., Wynstra, F. & van Raaij, E.M. (2015) An exploratory analysis of the
relationship between purchase category strategies and supply base structure,
Journal of Purchasing & Supply Management, Vol. 21 No.2, pp. 204-219.
Week 4
Supplier relationship management
ARTICLE
Kim, Y. & Choi, T.Y. (2015) Deep, sticky, transient, and gracious: An expanded
buyer-supplier relationship typology, Journal of Supply Chain Management, Vol.
51 No.3, pp.61-86.
Week 5
Contracting and contract management
ARTICLE
Cao, Z. & Lumineau, F. (2015) Revisiting the interplay between contractual and
relational governance: A qualitative and meta-analytical investigation, Journal of
Operations Management, Vol.33-34, pp. 15-42
Week 6
Global Purchasing
ARTICLE
Moretto, A., Patrucco, A.S. & Harland C.M. (2020) The dynamics of reshoring
decisions and the role of purchasing, International Journal of Production
Research, Vol. 58 No. 19, pp.5929-5944.
Week 7
Public Procurement
ARTICLE 1
Patrucco, A. S., Kauppi, K., Di Mauro, C., & Schotanus, F. (2024). Enhancing
strategic public procurement: a public service logic perspective.Public
Management Review, 1-21.
ARTICLE 2
Schiele, J.J. & McCue, C.P. (2006) Professional service acquisition in public sector
procurement,International Journal of Operations & Production Management, Vol.
26 No.3, pp.300-325.
,Learning Outcomes Purchasing
1. Discuss the essentials and principles of modern purchasing and supply management at
an advanced level;
2. Identify, explain and analyse current practices in terms of generic purchasing concepts
and theoretical frameworks;
3. Evaluate and compare relevant scientific papers in the area of purchasing;
4. Integrate and translate theory into managerial recommendations;
5. Develop and apply skills needed in real-life strategic purchasing.
Purchasing
Lecture 1: Introduction to key elements in purchasing
Purchasing describes the operational process of buying.
Strategic purchasing is how you
design the purchasing department
and processes for a high strategic
impact for an organisation. →
Purchasing is involved in
every stage of the supply
chain and the direct buyer
relationship.
Why is purchasing important?
• Reducing cost: costs should not exceed incomes. (Cost of purchased items in relation to
revenue).
• The outcome of buying something is also affected by factors such as quality etc.
Don’t just focus on buying the lowest price, take into account all factors such as transport,
failure costs, quality etc.
You need to make trade-offs on what the optimal solution is with factors such as cost reduction,
risk management and the value you want to provide. As a result there is much overlap between
the purchasing and finance department. (see figure below)
,Purchasing situations: each type varies based on the product being purchased, supplier, and
level of uncertainty.
1. New task situation: when a company is
purchasing a product/service for the first time.
2. Modified Rebuy: when there is some change in
the purchasing conditions, such as a new supplier or
modification to the product.
3. Straight Rebuy: A routine, repeat purchase of a
product or service that the company is familiar with.
The contextual aspect of purchasing has a big impact on how you proceed. And affects how you
purchase your items.
In the past, purchasing was always about cost reduction, get something for the lowest price
possible. Nowadays, service, risk, cost and sustainability all play a role.
Purchasing nowadays is seen as part of the management team, in the past it was only a
supportive function. Now there’s a whole department focussed on it.
Purchasing involves buying, contracting, risk management and relationship management (with
suppliers)
Skills involved in purchasing is negotiation, leadership, strategic thinking, conflict resolution,
project management, change management, communication skills etc
Context around purchasing is very important.
, W1 - Mogre, R., Lindgreen, A. & Hingley, M. (2017) Tracing the evolution of purchasing
research: future trends and directions for purchasing practices.
The paper traces the evolution of purchasing from a single business function to a cross-
functional business process. This transition involves the integration of purchasing with various
other business areas.
Purchasing & Strategy: Purchasing has become a strategic capability; the paper lists multiple
theoretical approaches of purchasing strategies. E.g. Kraljic (1983) suggests choosing
purchasing strategies according to the importance of the purchased product and the complexity
of the supplier market.
Reck & Long (1988) four stages of development: passive, independent, supportive & integrative
purchasing.
Bensaou (1999) different types of buyer-supplier relationships: market exchange, captive buyer,
captive supplier & strategic partnership.
Purchasing & decision-making: Decision-making research in purchasing focuses on supplier
selection & supply base, with trends including incorporating supply chain risk and green
practices as criteria in the supplier selection process.
Purchasing & Marketing: Although separate fields, integration is becoming important due to
the prevalence of outsourcing and need for customer-centric solutions. Modern marketeers are
solution-oriented and require involvement of purchasing functions. Alignment helps deliver
effective solutions to customers.
Purchasing & supply chain management: Supply chain management encompasses all
planning & activities in sourcing, procurement, conversion and logistics and includes
coordination with channel. Purchasing is a key part of SCM, and integration is thus important
(unionist approach).
Future Trends & directions for purchasing practices
5 key areas for future purchasing practices.
1. Sustainable purchasing: includes green and ethical purchasing. The driver of
sustainable SCM is cost savings and environmental goals like waste reduction and
pollution reduction.
2. Ethical purchasing: This involves respecting international standards (legislations),
ensuring human rights, and improving the lives of people in the supply chains. Through
increasing transparency in the sourcing process.
3. Purchasing in the digital economy: impact of big data & internet on supply chains.
Ensuring better supply chain visibility and information on consumer behaviour. Also
changed the relationships.
4. Purchasing & supply chain risk management: mitigating the negative effects of supply
chain risks, emphasizing the strategic role of purchasing. Done through risk-sharing
mechanisms through contract design.
5. Public Sector Purchasing: categorised into: regulations, partnering (public/private
sector purchasing) and individual competencies of purchasing managers
Week 1
Introduction to the key elements in purchasing
ARTICLE
Mogre, R., Lindgreen, A. & Hingley, M. (2017) Tracing the evolution of purchasing
research: future trends and directions for purchasing practices, Journal of
Business & Industrial Marketing, Vol.32 No.2, pp.251-257.
Week 2
Purchasing as a strategic function
ARTICLE
Luzzini, D. & Ronchi, S. (2011) Organizing the purchasing department for
innovation, Operations Management Research, Vol. 4 No.1, pp. 14-27.
Week 3
Implementing the purchasing strategy
ARTICLE
Ateş, M.A., Wynstra, F. & van Raaij, E.M. (2015) An exploratory analysis of the
relationship between purchase category strategies and supply base structure,
Journal of Purchasing & Supply Management, Vol. 21 No.2, pp. 204-219.
Week 4
Supplier relationship management
ARTICLE
Kim, Y. & Choi, T.Y. (2015) Deep, sticky, transient, and gracious: An expanded
buyer-supplier relationship typology, Journal of Supply Chain Management, Vol.
51 No.3, pp.61-86.
Week 5
Contracting and contract management
ARTICLE
Cao, Z. & Lumineau, F. (2015) Revisiting the interplay between contractual and
relational governance: A qualitative and meta-analytical investigation, Journal of
Operations Management, Vol.33-34, pp. 15-42
Week 6
Global Purchasing
ARTICLE
Moretto, A., Patrucco, A.S. & Harland C.M. (2020) The dynamics of reshoring
decisions and the role of purchasing, International Journal of Production
Research, Vol. 58 No. 19, pp.5929-5944.
Week 7
Public Procurement
ARTICLE 1
Patrucco, A. S., Kauppi, K., Di Mauro, C., & Schotanus, F. (2024). Enhancing
strategic public procurement: a public service logic perspective.Public
Management Review, 1-21.
ARTICLE 2
Schiele, J.J. & McCue, C.P. (2006) Professional service acquisition in public sector
procurement,International Journal of Operations & Production Management, Vol.
26 No.3, pp.300-325.
,Learning Outcomes Purchasing
1. Discuss the essentials and principles of modern purchasing and supply management at
an advanced level;
2. Identify, explain and analyse current practices in terms of generic purchasing concepts
and theoretical frameworks;
3. Evaluate and compare relevant scientific papers in the area of purchasing;
4. Integrate and translate theory into managerial recommendations;
5. Develop and apply skills needed in real-life strategic purchasing.
Purchasing
Lecture 1: Introduction to key elements in purchasing
Purchasing describes the operational process of buying.
Strategic purchasing is how you
design the purchasing department
and processes for a high strategic
impact for an organisation. →
Purchasing is involved in
every stage of the supply
chain and the direct buyer
relationship.
Why is purchasing important?
• Reducing cost: costs should not exceed incomes. (Cost of purchased items in relation to
revenue).
• The outcome of buying something is also affected by factors such as quality etc.
Don’t just focus on buying the lowest price, take into account all factors such as transport,
failure costs, quality etc.
You need to make trade-offs on what the optimal solution is with factors such as cost reduction,
risk management and the value you want to provide. As a result there is much overlap between
the purchasing and finance department. (see figure below)
,Purchasing situations: each type varies based on the product being purchased, supplier, and
level of uncertainty.
1. New task situation: when a company is
purchasing a product/service for the first time.
2. Modified Rebuy: when there is some change in
the purchasing conditions, such as a new supplier or
modification to the product.
3. Straight Rebuy: A routine, repeat purchase of a
product or service that the company is familiar with.
The contextual aspect of purchasing has a big impact on how you proceed. And affects how you
purchase your items.
In the past, purchasing was always about cost reduction, get something for the lowest price
possible. Nowadays, service, risk, cost and sustainability all play a role.
Purchasing nowadays is seen as part of the management team, in the past it was only a
supportive function. Now there’s a whole department focussed on it.
Purchasing involves buying, contracting, risk management and relationship management (with
suppliers)
Skills involved in purchasing is negotiation, leadership, strategic thinking, conflict resolution,
project management, change management, communication skills etc
Context around purchasing is very important.
, W1 - Mogre, R., Lindgreen, A. & Hingley, M. (2017) Tracing the evolution of purchasing
research: future trends and directions for purchasing practices.
The paper traces the evolution of purchasing from a single business function to a cross-
functional business process. This transition involves the integration of purchasing with various
other business areas.
Purchasing & Strategy: Purchasing has become a strategic capability; the paper lists multiple
theoretical approaches of purchasing strategies. E.g. Kraljic (1983) suggests choosing
purchasing strategies according to the importance of the purchased product and the complexity
of the supplier market.
Reck & Long (1988) four stages of development: passive, independent, supportive & integrative
purchasing.
Bensaou (1999) different types of buyer-supplier relationships: market exchange, captive buyer,
captive supplier & strategic partnership.
Purchasing & decision-making: Decision-making research in purchasing focuses on supplier
selection & supply base, with trends including incorporating supply chain risk and green
practices as criteria in the supplier selection process.
Purchasing & Marketing: Although separate fields, integration is becoming important due to
the prevalence of outsourcing and need for customer-centric solutions. Modern marketeers are
solution-oriented and require involvement of purchasing functions. Alignment helps deliver
effective solutions to customers.
Purchasing & supply chain management: Supply chain management encompasses all
planning & activities in sourcing, procurement, conversion and logistics and includes
coordination with channel. Purchasing is a key part of SCM, and integration is thus important
(unionist approach).
Future Trends & directions for purchasing practices
5 key areas for future purchasing practices.
1. Sustainable purchasing: includes green and ethical purchasing. The driver of
sustainable SCM is cost savings and environmental goals like waste reduction and
pollution reduction.
2. Ethical purchasing: This involves respecting international standards (legislations),
ensuring human rights, and improving the lives of people in the supply chains. Through
increasing transparency in the sourcing process.
3. Purchasing in the digital economy: impact of big data & internet on supply chains.
Ensuring better supply chain visibility and information on consumer behaviour. Also
changed the relationships.
4. Purchasing & supply chain risk management: mitigating the negative effects of supply
chain risks, emphasizing the strategic role of purchasing. Done through risk-sharing
mechanisms through contract design.
5. Public Sector Purchasing: categorised into: regulations, partnering (public/private
sector purchasing) and individual competencies of purchasing managers
