Value-driven vs. market-driven purchasing of kitchen cabinets in Challenging Lean Construction Thinking: What Do We Think and What Do We Know?
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 (Refereed)
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.
, 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
Lean purchasing; Prefabrication; Purchasing strategies; Supply chain management
Engineering and Technology
IdentifiersURN: urn:nbn:se:liu:diva-101164OAI: oai:DiVA.org:liu-101164DiVA: diva2:665588
18th Annual Conference of the International Group for Lean Construction, Haifa, Israel from July 14th – 16th, 2010