Purchasing's Involvement in Time‐Based Strategies

A BACKGROUND PERSPECTIVE Since the early 1970s the emphasis of competitive strategy has shifted from productivity, to quality, to cycle-time reduction.[1] From the late 1980s through the 1990s, "time" has been the focus of many leading organizations in manufacturing and service, both private and public, domestic and foreign. The motive for this focus has been for strategic advantage, and often survival. Today quality is not only expected, but is essential in order to attain a competitive advantage. Consequently, purchasing executives predict that the ability of firms to bring new products to market quickly will only increase in importance during the late 1990s.[2] This article reports the results of a focus study performed for the Center for Advanced Purchasing Studies (CAPS).[3] It focuses on two major aspects of time-based strategies: elapsed time and synchronization. These terms are defined in Table I. The purpose of the study was to determine purchasing's current use of and involvement in time-based strategies and what purchasing professionals think their use and involvement should be. Empirical testing shows that timeliness is a key dimension of logistics strategy.[4] Researchers also note that too much effort is devoted to reducing manufacturing cycle time, which generally accounts for less than half the total cycle time.[5] Instead, efforts should be made to reduce cycle time throughout the system, including the area of purchasing and supply management. This study found that many firms had cycle-time reduction programs and material-flow synchronization initiatives in place, some for as long as five years. However, as shown in Figures 1 and 2 (see page 4), over 20 percent of the firms surveyed have not yet instituted these initiatives. Purchasing can play a critical role in reducing cycle time by: * reducing supplier lot sizes and leadtimes * using single sourcing * improving supplier quality * acting as a liaison between manufacturing and suppliers to reduce the design/development cycle[6] Purchasing can also play a key role in reducing cycle times through concurrent engineering (CE) and early supplier involvement (ESI) efforts. This often occurs through the formation of both temporary and permanent cross-functional teams.[7] Despite purchasing's potential for contributing to time-based strategies, most prior research has been descriptive and anecdotal, or has concentrated on more specific areas of cycle time reduction, such as product development or general team participation.[8] As a result, this study focused on research questions that would expand the knowledge of purchasing's involvement in time-based strategies beyond the conceptual level, across a wide range of industries. This article reports on four research questions that were part of a larger study: 1. Do purchasing organizations have programs in place to support purchasing-related time-based strategies? 2. What is the current extent versus the desired extent of purchasing-related initiatives to reduce elapsed time? 3. What is the current extent versus the desired extent of implemented material-flow synchronization activities? 4. What is the actual extent versus the desired extent of changes in purchasing's organizational structures, responsibility, and authority to support purchasing-related time-based strategies? The next section describes the methodology used to investigate the research questions. HOW THE RESEARCH DATA WERE OBTAINED A survey questionnaire package was developed and pre-tested with the project's advisory committee. The advisory committee consisted of industry members associated with the Center for Advanced Purchasing Studies (CAPS). The questionnaire was designed to solicit responses to questions about the firm's current use of time-based strategies versus their opinion of what should be the situation in their firm. …