5.3 Model 3: Impact of a successful project organization on the fit between purchase
5.3.5 Impact of the procurement competence on the fit between purchase
Finally, the assumption concerning the impact of the procurement competence on the appropriate fit between purchase situation and B2B E-marketplace are discussed. The following three thoughts provide basis for argumentation:
(1) Only with the relevant knowledge the right products for the right B2B E-marketplace concept can be selected.
(2) For convincing the right supplier to participate in the new E-procurement environment, a sound know-how is necessary.
(3) Only with the appropriate competence lasting supplier relationships can be built on the new E-procurement platform.
Adl: Based on the appropriate procurement know-how, the buyer is able to identify the right products and the appropriate B2B E-marketplace concept.
For a solid purchase situation assessment the procurement personnel has to be specially trained. As soon as the supply needs have been established and precisely described, the buyer begins an investigation of the market to identify potential sources of supply. Depending on the product, if it is a routine item or a new item, the intensity of investigation varies (Dobler
& Burt 1996, p. 66). In highly complex innovations the supplier selection process can already be started during the product development phase (Wolters 1999, p. 259). Procurement professionals have to assess diverse levels of abstraction (van Weele 2000, p. 269). Starting with the product level, they have to focus on establishing and improving the supplier's product quality, incoming inspections and quality inspections have to be approved. The next level is the process level, where the state of the supplier's machinery and the quality control system are subject to in-depth auditing. By proving the supplier's processes, if they are under control through consistent application of quality procedures, the buyer has clarity about the expressed quality standards and specifications. Further analysis is conducted in the quality assurance system level with focus on the way, in which procedures regarding quality inspection are developed, kept up-to-date, maintained and refined. Last but not least the company level has to be proved. Financial aspects have to be taken into account. The quality of the management has to be proved (Sebastian & Niederdrenk 1999). Based on this assessment the relationship attractiveness can be determined. The buyer needs to have a clear picture about the purchase situation to identify products, which can be successfully transferred to the new procurement environment. If the products are identified, the appropriate B2B E- marketplace concept has to be selected. Only based on procurement know-how the critical issues of the current process can be taken into account.
Ad2: With the right procurement competence the buyer has a realistic view of his strengths in negotiating with the supplier.
106 5 Theoretical framework and hypotheses of the study
Bourantas (1989, p. 140) posits that "organizations are open systems which engage in exchanges and transactions with other organizations or elements of their environment and as a result, they inevitably become dependent upon their environment". Pfeffer and Salancik (1978, p. 141) define dependence as "the product of the importance of a given input or output to the organization and the extent to which it is controlled by relatively few organizations". In an effort to avoid or at least to minimize this dependence, the buyer should aim to understand the supplier market competitiveness. The buyer has to analyze in detail the substitutability of the source. He has to check the ability to replace the source of a particular resource with another one. The greater this ability, the lower is his dependence upon that source. Therefore, the buyer has to find out the existence of other sources of a given resource and he has to evaluate the cost incurred by such a substitution (Bourantas 1989). In case of only limited sources the buyer has to take into account costs occurring due to supply risk in case of delays caused by the supplier (e.g. production problems, delivery delays) (Homburg 1995, p. 817).
For evaluation of these different drivers determining the dependence on the supplier, procurement professionals need to have the appropriate knowledge.
Ad3: Competent procurement professionals are able to build successful supplier relationships, which survive the transfer to the new procurement environment.
The buyer must have the appropriate knowledge to build a trustworthy relationship with the supplier, so that he will support the new procurement environment and adapt his processes.
Mutual dependence and trust are related to environmental uncertainty, transaction-specific investments, reputation and satisfaction in such a supplier relationship (Ganesan 1994, p. 1).
The buyer needs to be able to evaluate, which investments to make, how to enable risk sharing and how to satisfy the supplier. Based on Ritter (1998) showing that network competence has a positive impact on the technological interweavement, the author assumes a positive correlation between procurement competence and supplier relationships. Due to the appropriate procurement know-how, the buyer is able to handle conflicts with the supplier concerning the new E-processes. The procurement competence enables the buyer to recognize further development potentials. He knows, how to utilize these to convince the supplier to keep the relationship. By appropriate information sharing and adequate communication frequency the buyer might gain the requested satisfaction of the supplier, which supports a long-term orientation even in the new procurement environment (Cannon et al. 1998). The
underlying motivation for long-term co-operations is that of competitive advantage derived from the supply chain as a whole rather than individual companies (Zheng et al. 1998).
Combining all these aspects, the procurement competence is a main driver to define the right fit between purchase situation and B2B E-marketplace:
Proposition 11: The higher the competence in the procurement organization is, the better is the fit between purchase situation and B2B £-marketplace.