Improving business by integrating the procurement process

Much of managers’ attention when it comes to increasing the organisational effectiveness has today turned from an intra-enterprise focus towards an inter-enterprise focus. Managers have realized that the integration and coordination of for instance procurement activities can give significant benefits.

Previously EDI have been the most important information communication vehicle but the Internet is being used more and more. This thesis focuses on the problems and opportunities that distributors’ of industrial goods and services may experience if they decide to integrate their procurement processes with their suppliers via the Internet. We intend to examine which the driving and inhibiting factors are as well as their impact on the distributor’s decision to integrate with the supplier or not. To reach our objective we have conducted a multiple case study of five distributors in the industrial supply sector.

Our study shows that drivers of integration are first of all efficiency improvements. Strategic benefits do not drive the development to the same extent since they are hard to concrete. The most important inhibitors include incompatibility between different systems and formats and cultural factors.

Author: Hagelberg, Henrik; Johansson, Henrik

Source: Lulea University of Technology

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