The Overlooked Power of Procurement Strategies on Corporate Competitive Advantage
Leppäniemi, Yi (2024)
2024
All rights reserved. This publication is copyrighted. You may download, display and print it for Your own personal use. Commercial use is prohibited.
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024122037898
https://urn.fi/URN:NBN:fi:amk-2024122037898
Tiivistelmä
This study explored how procurement strategies contribute to competitive advantage in a Finnish chemical personal care manufacturing organization. It focuses on four key aspects: cost management, supplier collaboration, sustainability, and innovation. The research aimed to uncover how procurement can transition from a cost-focused function to a strategic enabler aligned with organizational priorities.
The discussion centers on the organization’s strategic priority of strengthening competitiveness, which is examined through five focus areas: leveraging group synergies, ensuring efficient processes, achieving cost competitiveness, increasing profitability, and optimizing capital use. These areas provide a framework for evaluating procurement’s strategic contributions and aligning its practices with broader organizational goals.
The objectives of the study were to identify key components of procurement strategies that contribute to corporate competitive advantage, address challenges and barriers to adopting strategic procurement practices, and provide actionable recommendations for aligning procurement strategies with future organizational goals.
A qualitative case study approach was adopted, combining semi-structured interviews with key stakeholders and secondary data analysis to provide a comprehensive understanding of procurement practices. Thematic analysis identified recurring patterns and themes, ensuring a detailed interpretation of procurement’s strategic role.
The study addressed the following research questions: How can procurement be more effectively leveraged and integrated into the organization’s strategic framework to enhance its competitive position in the marketplace?
The findings revealed that procurement significantly contributes to competitive advantage through supplier consolidation, which reduces complexity; sustainability initiatives that align with regulatory requirements; and cost efficiency achieved through bulk purchasing and lean inventory practices. However, challenges such as limited supplier-driven innovation, balancing sustainability with cost priorities, and vulnerabilities in supply chain resilience were also identified.
The current procurement strategies show strengths in cost management and sustainability but reveal gaps in supplier accountability, digital integration, and proactive innovation. Addressing these gaps requires enhancing supplier qualification, integrating sustainability across functions, aligning procurement with organizational goals, adopting digital tools, fostering stronger supplier collaborations, and establishing measurable KPIs to align with senior management priorities.
The study concludes that procurement plays a pivotal role in aligning operational and strategic goals. Addressing identified challenges can elevate procurement as a key driver of competitive advantage, fully leveraging its potential to support the organization’s long-term success.
The discussion centers on the organization’s strategic priority of strengthening competitiveness, which is examined through five focus areas: leveraging group synergies, ensuring efficient processes, achieving cost competitiveness, increasing profitability, and optimizing capital use. These areas provide a framework for evaluating procurement’s strategic contributions and aligning its practices with broader organizational goals.
The objectives of the study were to identify key components of procurement strategies that contribute to corporate competitive advantage, address challenges and barriers to adopting strategic procurement practices, and provide actionable recommendations for aligning procurement strategies with future organizational goals.
A qualitative case study approach was adopted, combining semi-structured interviews with key stakeholders and secondary data analysis to provide a comprehensive understanding of procurement practices. Thematic analysis identified recurring patterns and themes, ensuring a detailed interpretation of procurement’s strategic role.
The study addressed the following research questions: How can procurement be more effectively leveraged and integrated into the organization’s strategic framework to enhance its competitive position in the marketplace?
The findings revealed that procurement significantly contributes to competitive advantage through supplier consolidation, which reduces complexity; sustainability initiatives that align with regulatory requirements; and cost efficiency achieved through bulk purchasing and lean inventory practices. However, challenges such as limited supplier-driven innovation, balancing sustainability with cost priorities, and vulnerabilities in supply chain resilience were also identified.
The current procurement strategies show strengths in cost management and sustainability but reveal gaps in supplier accountability, digital integration, and proactive innovation. Addressing these gaps requires enhancing supplier qualification, integrating sustainability across functions, aligning procurement with organizational goals, adopting digital tools, fostering stronger supplier collaborations, and establishing measurable KPIs to align with senior management priorities.
The study concludes that procurement plays a pivotal role in aligning operational and strategic goals. Addressing identified challenges can elevate procurement as a key driver of competitive advantage, fully leveraging its potential to support the organization’s long-term success.