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Value-driven vs. market-driven purchasing of kitchen cabinets in Challenging Lean Construction Thinking: What Do We Think and What Do We Know?
Linköping University, Department of Management and Engineering, Industrial Marketing and Industrial Economics. Linköping University, The Institute of Technology.
Björnfot, A., Department of Civil, Mining, and Environmental Engineering, Luleå University of Technology, Luleå, Sweden.
Linköping University, Department of Management and Engineering, Logistics Management. Linköping University, The Institute of Technology.
2010 (English)In: Challenging Lean Construction Thinking: What Do We Think and What Do We Know? - 18th Annual Conference of the International Group for Lean Construction, IGLC 18, 2010, 202-211 p.Conference paper, Published paper (Refereed)
Abstract [en]

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 Swedens 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.

Place, publisher, year, edition, pages
2010. 202-211 p.
Series
Challenging Lean Construction Thinking: What Do We Think and What Do We Know? - 18th Annual Conference of the International Group for Lean Construction, IGLC 18
Keyword [en]
Lean purchasing; Prefabrication; Purchasing strategies; Supply chain management
National Category
Engineering and Technology
Identifiers
URN: urn:nbn:se:liu:diva-101164OAI: oai:DiVA.org:liu-101164DiVA: diva2:665588
Conference
18th Annual Conference of the International Group for Lean Construction, Haifa, Israel from July 14th – 16th, 2010
Available from: 2013-11-20 Created: 2013-11-19 Last updated: 2013-11-20

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Bildsten, LouiseSandberg, Erik

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CiteExportLink to record
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  • apa
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