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Purchasing in Construction Companies

Bildsten, Louise LU (2016)
Abstract (Swedish)
A significant part of the cost of a construction project, up to 90%, consists of purchased goods and services. Suppliers thereby have a large impact on the quality, price and time of projects. Purchasing management is therefore important for the outcome of a project. The aim of research covered by this thesis is to describe and analyse purchasing management and its interrelation with the supplier relationships and the production process. The research design was twofold: theory building and case studies. In the latter, the initial phase was inductive through studies of industrialized building, changing to abductive and, thereafter, deductive when tentative theories were tested within construction companies. The findings were that... (More)
A significant part of the cost of a construction project, up to 90%, consists of purchased goods and services. Suppliers thereby have a large impact on the quality, price and time of projects. Purchasing management is therefore important for the outcome of a project. The aim of research covered by this thesis is to describe and analyse purchasing management and its interrelation with the supplier relationships and the production process. The research design was twofold: theory building and case studies. In the latter, the initial phase was inductive through studies of industrialized building, changing to abductive and, thereafter, deductive when tentative theories were tested within construction companies. The findings were that maintaining supplier relationships and, at the same time, retaining competition with several suppliers are desirable. The construction industry has been portrayed by some researchers as price-driven with respect to the choice of suppliers. The research reveals that the choice of suppliers is based to a large extent on long-term relationships, where the trustworthiness of suppliers plays an important part. Through long-term relationships, the project team can rely on the experiences acquired from previous purchases to overcome problems of coordination, communication and integration. It is important for construction companies to recognize that the project team possesses significant knowledge about the nature of services and products delivered by different subcontractors and suppliers. Decisions that are not made in collaboration with those involved in production can lead to lower quality, higher cost and later project delivery than might otherwise be the case. A combination of skills purchasing and construction seems appropriate for project managers. The theoretical contributions of the research consist of: (1) a framework on waste and coordination; (2) a framework comparing value-driven and market-driven purchasing; (3) a portfolio matrix considering the aspects of intensity and time perspective in purchaser-supplier relationships; (4) a framework to serve as a guide to describe and analyse the purchasing process in the companies that were examined; and (5) a portfolio matrix to portray purchasing in construction companies based on the findings. (Less)
Please use this url to cite or link to this publication:
author
supervisor
organization
publishing date
type
Thesis
publication status
published
subject
keywords
construction, Purchasing, Kraljic model, buying centre, actors, roles, sourcing structures
edition
1
pages
78 pages
publisher
Printed in Sweden by Media-Tryck, Lund University
ISBN
978-91-85257-14-0
language
Swedish
LU publication?
yes
id
5672795b-a7fa-4337-b5e7-0f05ed13ed30 (old id 8872012)
date added to LUP
2016-05-02 09:30:29
date last changed
2016-09-19 08:45:20
@misc{5672795b-a7fa-4337-b5e7-0f05ed13ed30,
  abstract     = {A significant part of the cost of a construction project, up to 90%, consists of purchased goods and services. Suppliers thereby have a large impact on the quality, price and time of projects. Purchasing management is therefore important for the outcome of a project. The aim of research covered by this thesis is to describe and analyse purchasing management and its interrelation with the supplier relationships and the production process. The research design was twofold: theory building and case studies. In the latter, the initial phase was inductive through studies of industrialized building, changing to abductive and, thereafter, deductive when tentative theories were tested within construction companies. The findings were that maintaining supplier relationships and, at the same time, retaining competition with several suppliers are desirable. The construction industry has been portrayed by some researchers as price-driven with respect to the choice of suppliers. The research reveals that the choice of suppliers is based to a large extent on long-term relationships, where the trustworthiness of suppliers plays an important part. Through long-term relationships, the project team can rely on the experiences acquired from previous purchases to overcome problems of coordination, communication and integration. It is important for construction companies to recognize that the project team possesses significant knowledge about the nature of services and products delivered by different subcontractors and suppliers. Decisions that are not made in collaboration with those involved in production can lead to lower quality, higher cost and later project delivery than might otherwise be the case. A combination of skills purchasing and construction seems appropriate for project managers. The theoretical contributions of the research consist of: (1) a framework on waste and coordination; (2) a framework comparing value-driven and market-driven purchasing; (3) a portfolio matrix considering the aspects of intensity and time perspective in purchaser-supplier relationships; (4) a framework to serve as a guide to describe and analyse the purchasing process in the companies that were examined; and (5) a portfolio matrix to portray purchasing in construction companies based on the findings.},
  author       = {Bildsten, Louise},
  isbn         = {978-91-85257-14-0},
  keyword      = {construction,Purchasing,Kraljic model,buying centre,actors,roles,sourcing structures},
  language     = {swe},
  month        = {05},
  pages        = {78},
  publisher    = {ARRAY(0xa288888)},
  title        = {Purchasing in Construction Companies},
  year         = {2016},
}