Evaluating the Advantages and Disadvantages of Centralized vs. Decentralized Purchasing: A Case Study of a Nigerian Grocery Store Chain
Akinade, Balqis (2024)
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024121636343
https://urn.fi/URN:NBN:fi:amk-2024121636343
Tiivistelmä
Purchasing decisions in grocery business accounts for a substantial part of the operating cost. Considering its significance, the advantages and disadvantages of centralized and decentralized purchasing methods in Nigerian grocery store chains were evaluated. The challenges faced by a Nigerian grocery chain in optimizing resource allocation while achieving operational efficiency and effectiveness were investigated.
A qualitative case study examined the advantages and disadvantages of centralized versus decentralized purchasing within Nigerian grocery store chains. Semi-structured interviews were conducted with procurement teams and store managers from a single chain operating across multiple locations in Southwest Nigeria. The research investigated the impacts of each purchasing model on operational efficiency, inventory management, supplier relationships, and responsiveness to market demands.
Findings revealed that centralized purchasing offered significant cost savings and streamlined operations, but also resulted in communication challenges and reduced responsiveness to localized demands. Decentralized purchasing, conversely, demonstrated enhanced flexibility and responsiveness but lacked the economies of scale achievable through centralization. The study concludes by highlighting the im-portance of aligning purchasing strategy with overall business goals and suggests areas for future research.
A qualitative case study examined the advantages and disadvantages of centralized versus decentralized purchasing within Nigerian grocery store chains. Semi-structured interviews were conducted with procurement teams and store managers from a single chain operating across multiple locations in Southwest Nigeria. The research investigated the impacts of each purchasing model on operational efficiency, inventory management, supplier relationships, and responsiveness to market demands.
Findings revealed that centralized purchasing offered significant cost savings and streamlined operations, but also resulted in communication challenges and reduced responsiveness to localized demands. Decentralized purchasing, conversely, demonstrated enhanced flexibility and responsiveness but lacked the economies of scale achievable through centralization. The study concludes by highlighting the im-portance of aligning purchasing strategy with overall business goals and suggests areas for future research.