Value-driven Purchasing of Kitchen Cabinets in Industrialized Housing
2011 (English)In: Journal of Financial Management of Property and Construction, ISSN 1366-4387, Vol. 16, no 1, 73-83 p.Article in journal (Refereed) Published
Purpose - 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.
Design/methodology/approach - A theoretical framework is proposed by comparing characteristics of market-driven vs. value-driven purchasing that clarifies the benefits and drawbacks of these two strategies. An explorative case study of kitchen carpentry at a house manufacturer illustrates purchasing of kitchen cabinets in the industrialized housing industry in relation to the proposed framework.
Findings – According to the case study, from a value perspective, a long-term relationship with a dedicated local, smaller supplier is a preferable choice over a short-term bulk supplier, even if the short-term supplier has (much) lower prices.
Research limitations/implications – This is a single-case study that should be verified by further empirical work of a test-delivery from the local sub-system manufacturer. Such a study would provide more insights into this area of work and make it possible to thoroughly evaluate potential risks. The indicative results in this paper can be made conclusive through quantification of the proposed Lean purchasing characteristics.
Originality/value – A comparison of value-driven and market-driven purchasing is carried out in theory and applied to a real case study that brings new perspectives to purchasing. In this way, the article proposes alternative purchasing strategies to the construction industry.
Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2011. Vol. 16, no 1, 73-83 p.
Lean purchasing, prefabrication, purchasing strategies, supply chain management
IdentifiersURN: urn:nbn:se:liu:diva-67110DOI: 10.1108/13664381111116106OAI: oai:DiVA.org:liu-67110DiVA: diva2:407343