Applying Purchasing Category Management on a purchasing department to increase its performances : A case study with a luxury automotive manufacturer

Sammanfattning: Nowadays, manufacturing companies compete as much with their products as with their supply-chain. Within the overarching stages of supply-chain, purchasing is a process that responds to the organizations needs of acquiring raw materials, components and semi-finished products in order to enable the execution of operations. Purchasing is an important aspect of an organization, having a big influence on its competitive positioning. In order to achieve better organizational performance, companies spendings are often separated into discrete groups of products and services, using a combination of supplier-relationship management, category-specific strategies and cross-functional teams. This segmentation is called purchasing category management, and is expected in many cases to improve the overall purchasing performance. Therefore, a case study was conducted with the purpose of investigating how PCM could help a luxury automotive manufacturer facing purchasing problems to improve its operational performance. This thesis presents a framework built on previous studies exposing what factors are linked to purchasing performance and explaining the concept of purchasing category management. The framework shows the importance of purchasing expertise, cross-functional work, clear organizational structures, strategic purchasing and monitoring of performance. The study identifies the problems the case company is experiencing: Lack of cooperation between departments; a troublesome purchasing structure leading to duplicated work and insufficient technical knowledge; a conflictual cross-functional cooperation between purchasers and engineers and lastly a lack of monitoring of the performance of purchasers and suppliers. At last, a discussion is held of how these problems could be mitigated by guidelines found in the literature and the use of category management. This study identifies a gap in research on the topic of purchasing category management. This gap was compensated through the use of complementary literature on the topics of purchasing and purchasing performance.