Purchasing-logistics integration and supplier performance: an information-processing view

• DOI: https://doi.org/10.1108/IJLM-07-2014-0113
• Published date: 08 May 2017
• Date: 08 May 2017
• Pages: 379-397
• Author: Bryan Ashenbaum,Arnold Maltz
• Subject Matter: Management science & operations,Logistics

Purchasing-logistics integration

and supplier performance: an

information-processing view

Bryan Ashenbaum

Department of Management, Miami University, Oxford, Ohio, USA, and

Arnold Maltz

Department of Supply Chain Management, Arizona State University, Tempe,

Arizona, USA

Abstract

Purpose –The purpose of this paper is to develop a purchasing-logistics integration (PLI) conceptualization

along two dimensions: mutual responsibility and integrative efforts. This conceptualization is then tested as

to whether it provides any insights for supplier performance.

Design/methodology/approach –Information-Processing Theory is used to posit hypotheses linking the

dimensions of PLI with various measures of supplier performance. Hypotheses are then tested with a dyadic

data set of purchasing and logistics managers, using multiple regression methods.

Findings –Purchasing managers f ound mutual responsib ility to positively inf luence supplier delive ry

speed, whereas logistics managers found it to positively influence supplier price performance.

Generally speaking, purchasing managers perceived a stronge r linkage between for mal integrative

efforts (liaison role s and joint reward syste ms) and supplier perfor mance, whereas logis tics managers

perceived this linkag e to be stronger for inf ormal integrative ef forts such as informa tion exchange

and collaboration.

Research limitations/implications –Study results are cross-sectional in nature and consist of three major

industry groupings. The dyadic data were analyzed separately to avoid significant data loss.

Practical implications –Supply chain managers will find the areas where purchasing and logistics

managers overlap in their perceptions (as well as where they differ) useful. In addition, an understanding of

how PLI influences supplier performance should help improve organizational effectiveness.

Originality/value –PLI is a highly important, yet understudied, internal connection. This study provides a

useful framework in helping academics and practitioners better understand this crucial internal connection,

and how it relates to the performance extracted from suppliers.

Keywords Logistics, Collaboration, Integration, Purchasing, Supplier performance

Paper type Research paper

1. Introduction

An anecdote from a recent University report:

A logistics executive […] hosted a “supply chain management advisory board.”During dinner at a

local restaurant, [he] noticed another group from their firm with a group of visitors in another

private room in the restaurant. It turned out this other group consisted of the company’s

purchasing executives hosting their own “supply chain management advisory board.”Neither

group […] had any knowledge that the other group was meeting, nor what they were talking about

(Stank et al., 2014, pp. 7-8).

Contrast the above with quotes from the supply chain related trade press:

[…] purchasing chiefs like him must have better visibility over logistics costs. That is one reason

why Cheng recently made the decision to pull his purchasing and logistics divisions together […]

(Chow, 2010, p. 39).

It’s really looking at a supply chain perspective and really breaking it down to just the sourcing,

customs and logistics pieces of that chain, and how they all need to be integrated so that the

execution can happen (Clarke, 2007).

The International Journal of

Logistics Management

Vol. 28 No. 2, 2017

pp. 379-397

© Emerald PublishingLimited

0957-4093

DOI 10.1108/IJLM-07-2014-0113

Received 19 July 2014

Revised 10 October 2015

16 December 2015

15 February 2016

17 February 2016

Accepted 17 February 2016

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

379

PLI and

supplier

performance

Crisp’s research during the 1990s showed that high-performance organizations like Toyota, Apple,

and Hewlett-Packard integrated their logistics, service management, and purchasing functions

(Wraige, 2001, p. 34).

Which more accurately reflects current practice? Are companies increasingly integrating

purchasing and logistics together in streamlined supply chain organizations, or is the “left

hand unaware of what the right hand is doing”scenario still the status quo? Managers have

understood the need for successful purchasing and logistics integration (PLI) for some time

(see, e.g. Buxbaum, 1995; Cole and Baron, 2003; Clarke, 2007; Chow, 2010; Andel, 2014; Bond,

2014). Even the names of supply chain professional organizations reflect this awareness.

The Council of Logistics Management and the National Institute for Purchasing

Management changed their names over a decade ago to (respectively) the Council of

Supply Chain Management Professionals and the Institute for Supply Management. As to

whether this vital integration has actually become more prevalent in the business world, the

jury seems to be out.

Meanwhile, academic treatments of PLI have beenrelatively scarce. Researchers certainly

acknowledge the importance of broader cross-functional integration (CFI) –Petersen (2013)

states “most supply chain professionals would agree that cross-functional integration is an

absolute requirement for supply chain maturity”(p. 19). PLI, however, tends to get at best a

casual mention in studies examining broader CFI concepts (see, e.g. Christopher and Towill,

2001; Fawcett and Magnan, 2002; McGinnis and Kohn, 2002; Wisner, 2003).

To date, there have been few academic treatments of PLI. Examples include an

exploratory case study of purchasing, logistics and operations (Pagell, 2004), a taxonomy

paper based upon mutual task allocation (Ashenbaum and Terpend, 2010), and an overview

of how purchasing and logistics have separately evolved over time (Fabbe-Costes and

Nollet, 2015). The University of Tennessee has also recently released a white paper detailing

the results of a broad survey of supply chain managers (Stank et al., 2014), which we assume

will generate future academic papers. What is lacking is the comprehensive development of

PLI constructs and definitions, as well as an exploration of whether PLI exhibits the

performance impacts seen in other cross-functional studies.

With this background in mind, this paper develops a multi-dimensional

conceptualization of PLI, and then applies the lens of Information-Processing Theory

(IPT) to propose and test hypotheses linking PLI to supplier performance.

The development of a richer PLI conceptualization, coupled with a theoretical lens to

sharpen examination of related phenomena, should provide a benefit to scholars and

managers alike.

The remainder of this paper is organized as follows. The next three sections review the

extant cross-functional literature, and develop the PLI conceptual framework and

hypotheses. Section 4 introduces IPT, and utilizes it to develop and propose testable

hypotheses regarding the interactions between PLI and supplier performance. Section 5

describes the study methodology, data analysis and results. Section 6 discusses and

interprets these findings, highlighting the implications for theory and practice. Section 7

concludes the paper with a listing of limitations and a call for future research.

2. CFI overview

This section highlights the extant CFI literature, providing a context for the subsequent PLI

conceptual development in Section 3. A thorough treatment of this literature, or even a

significant portion of it, would require more space than feasible. As such, this section does

not seek to discuss major findings or controversies in this body of work. Rather, it highlights

the major groupings of the cross-functional literature to further sharpen the PLI dimensions

presented later in the paper.

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