Value-driven vs Market-driven Purchasing of Kitchen Cabinets

• 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 Sweden’s 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.

Ämnesord

TEKNIK OCH TEKNOLOGIER  -- Samhällsbyggnadsteknik -- Husbyggnad (hsv//swe)

ENGINEERING AND TECHNOLOGY  -- Civil Engineering -- Building Technologies (hsv//eng)

Nyckelord

lean purchasing

prefabrication

purchasing strategies

supply chain management

TECHNOLOGY

TEKNIKVETENSKAP

Träbyggnad

Publikations- och innehållstyp

vet (ämneskategori)

kon (ämneskategori)