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Value-driven vs market-driven purchasing of kitchen cabinets

Bildsten, Louise LU ; Björnfot, Anders and Sandberg, Erik (2010) In Proceedings of the 18th Annual Conference of the International Group for Lean Construction p.202-211
Abstract (Swedish)
In economic and management literature, the relationship between supplier and buyer can be more or less intimate. It can vary from market-driven with a constant change of suppliers to a value-driven relationship with one sole supplier. Purchasing strategies of construction companies have often been described as short-sighted, where price is the most considered aspect. Recent lean management literature promote value-driven purchasing, since it provides benefits such as just-in-time delivery, zero defects and customized products through close technical collaboration. This article hypothesises that value-driven purchasing of customized kitchen cabinets is more profitable than market-driven purchasing in industrialized housing construction. The... (More)
In economic and management literature, the relationship between supplier and buyer can be more or less intimate. It can vary from market-driven with a constant change of suppliers to a value-driven relationship with one sole supplier. Purchasing strategies of construction companies have often been described as short-sighted, where price is the most considered aspect. Recent lean management literature promote value-driven purchasing, since it provides benefits such as just-in-time delivery, zero defects and customized products through close technical collaboration. This article hypothesises that value-driven purchasing of customized kitchen cabinets is more profitable than market-driven purchasing in industrialized housing construction. The hypothesis is examined through a case study of kitchen carpentry at one of Swedens largest producers of industrialized prefabricated multi-storey housing. By comparing characteristics of market-driven vs. value-driven purchasing, this article aims to further clarify the benefits and drawbacks of these two strategies. At the case company, kitchens are ordered cabinet-by-cabinet and then installed inside the factory. The company is considering the possibility of a long-term relationship with a smaller local supplier that can deliver a new kind of innovative kitchen cabinet solution that is prefabricated. If the local supplier can meet the expectations of just-in-time delivery, zero defects and a product tailor-made for the housing company, there is much to gain. (Less)
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author
publishing date
type
Chapter in Book/Report/Conference proceeding
publication status
published
subject
keywords
Purchasing, Construction industry, Supply chain management, lean purchasing, prefabrication, purchasing strategies, Ssupply chain management
in
Proceedings of the 18th Annual Conference of the International Group for Lean Construction
pages
10 pages
external identifiers
  • scopus:84866116265
language
English
LU publication?
no
id
75a71283-bf21-4a2a-a555-f112ff58cbca
date added to LUP
2016-12-07 15:43:27
date last changed
2018-05-29 12:14:29
@inproceedings{75a71283-bf21-4a2a-a555-f112ff58cbca,
  abstract     = {In economic and management literature, the relationship between supplier and buyer can be more or less intimate. It can vary from market-driven with a constant change of suppliers to a value-driven relationship with one sole supplier. Purchasing strategies of construction companies have often been described as short-sighted, where price is the most considered aspect. Recent lean management literature promote value-driven purchasing, since it provides benefits such as just-in-time delivery, zero defects and customized products through close technical collaboration. This article hypothesises that value-driven purchasing of customized kitchen cabinets is more profitable than market-driven purchasing in industrialized housing construction. The hypothesis is examined through a case study of kitchen carpentry at one of Swedens largest producers of industrialized prefabricated multi-storey housing. By comparing characteristics of market-driven vs. value-driven purchasing, this article aims to further clarify the benefits and drawbacks of these two strategies. At the case company, kitchens are ordered cabinet-by-cabinet and then installed inside the factory. The company is considering the possibility of a long-term relationship with a smaller local supplier that can deliver a new kind of innovative kitchen cabinet solution that is prefabricated. If the local supplier can meet the expectations of just-in-time delivery, zero defects and a product tailor-made for the housing company, there is much to gain.},
  author       = {Bildsten, Louise and Björnfot, Anders and Sandberg, Erik},
  booktitle    = {Proceedings of the 18th Annual Conference of the International Group for Lean Construction},
  keyword      = {    Purchasing, Construction industry, Supply chain management,lean purchasing,prefabrication,purchasing strategies,Ssupply chain management},
  language     = {eng},
  pages        = {202--211},
  title        = {Value-driven vs market-driven purchasing of kitchen cabinets},
  year         = {2010},
}