Strategic purchasing, supply management, and firm performance

Injazz J. Chen, Antony Paulraj, Augustine A. Lado

Research output: Journal PublicationArticlepeer-review

565 Citations (Scopus)

Abstract

Purchasing has increasingly assumed a pivotal strategic role in supply-chain management. Yet, claims of the strategic role of purchasing have not been fully subjected to rigorous theoretical and empirical scrutiny. Extant research has remained largely anecdotal and theoretically under-developed. In this paper, we examine the links among strategic purchasing, supply management, and firm performance. We argue that strategic purchasing can engender sustainable competitive advantage by enabling firms to: (a) foster close working relationships with a limited number of suppliers; (b) promote open communication among supply-chain partners; and (c) develop long-term strategic relationship orientation to achieve mutual gains. Using structural equation modeling, we empirically test a number of hypothesized relationships based on a sample of 221 United States manufacturing firms. Our results provide robust support for the links between strategic purchasing, supply management, customer responsiveness, and financial performance of the buying firm. Implications for future research and managerial practice in supply-chain management are also offered.

Original languageEnglish
Pages (from-to)505-523
Number of pages19
JournalJournal of Operations Management
Volume22
Issue number5
DOIs
Publication statusPublished - Oct 2004
Externally publishedYes

Keywords

  • Buyer performance
  • Strategic purchasing
  • Supply management

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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