How a purchasing process can be automated and its effects on the supplier relationship

by Strandberg, Diana; Larsson, Thorbjörn

Abstract (Summary)
Companies operate in a changing world with rapid technological development. Automation of the purchasing process in companies by means of electronic solutions is in line with this development. Companies constantly demand new concepts and electronic solutions in order to make the purchasing process more efficient, known as E-procurement management. This concept has become widespread in the automotive industry owing to that a car is a system product that on average consists of 20 000 parts, and consequently many transactions when purchasing these products. However, to be able to automate the purchasing process the company has to explore and analyze what new technology solutions there are. With regard to this, the study will focus to analyze how a purchasing process in the automotive industry can be automated. The authors have chosen to look deeper into three different electronic solutions. Thereto the study will examine what impact a certain type of product and supplier has concerning electronic solution. Additionally, how the buyer-supplier relationship is affected of automation is a fundamental question when considering automation, and will therefore be discussed in the study. These questions will concern to study both the buyer’s and the supplier’s perspective.The purpose of this thesis is to analyse how a purchasing process can be automated in strategic relationships in the automotive industry, thereto taking product and supplier type into consideration concerning electronic solutions. We will also study the possible effect on the buyer-supplier relationship of automation. A qualitative method has been employed, in order to get a more precise and deep knowledge of the subject. The authors have conducted interviews with respondents working at a large car manufacturing company in Sweden, and with three suppliers to this company.The study found that there are several areas in the purchasing process that still can be more efficient. Two technological drivers have been outlined as potential solutions: Covisint and web-EDI. Moreover, it is possible to conclude that an automation of a purchasing process will have an effect on the buyer-supplier relationship. The authors have drawn the conclusion that companies should not rush into things such as an automation. Much attention should be paid to the question what degree of an automation that can be allowed before it will have a negative effect on the relationship. Moreover, they should thoroughly study on what electronic solution is most suitable, thereto with consideration to what type of product and supplier one is dealing with.
Bibliographical Information:


School:Högskolan i Jönköping

School Location:Sweden

Source Type:Master's Thesis

Keywords:purchasing process product and supplier classification e procurement solutions buyer relationships


Date of Publication:02/27/2006

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