Thesis (MBA)--Stellenbosch University, 2007. / ENGLISH ABSTRACT: Purchasing strategies impact on the value added to operations by the items included
in the specific purchasing strategy. In mechanised mining operations the mining
equipment plays a significant role in the production process as it is the primary
production tools. This study reviews literature on the application of buyer-supplier
collaboration to purchasing strategies in order to improve the value added to
operations and focus on mining equipment purchasing.
Most authors agree that the origin of this type of relationship is the adoption of the
production management concept of Just-in-Time. Models for buyer supplier
collaboration include one dimensional models such as the Traditional and Advanced
Supply Management model, Models on the automotive industry, and Supplier
partnerships. The one dimensional models mainly compare traditional market type
supplier relationships to advanced partnership or relational type relationships. The
models reviewed also include multi-dimensional models such as the portfolio
management models and the strategic supplier segmentation model. These multidimensional
models propose the adoption of a variety of supplier management
models based on certain contextual parameters relating to the purchase and expands
on the one dimensional models.
The benefits of buyer-supplier collaboration include reduced inventory, increased
inventory turnover, reduced scrap, increased quality, reduced costs, improved
delivery reliability, design and productivity, reductions in lead time, and additional
effort from suppliers.
The risks associated with buyer-supplier collaboration include significant resource
requirements, lack of support from suppliers, shifting of inventory, industry type
exclusivity, higher switching costs, and increase in supplier's power.
Buyer-supplier collaboration has certain requirements to be successful. These include
a fundamental change in the purchasing strategy relating to supplier selection criteria,
number of sources and time horizon, multi-dimensional evaluations, a move to
single-sourcing and long term relationships. The development of buyer-supplier
collaboration is dependant on similarity in industry and technology, prior experiences
change, effective communication and information sharing, and experiential
learning. Other success factors include two-way information sharing, top
management support, shared goals, early communication to suppliers of specification
changes or new products, suppliers adding distinctive value, total quality
management initiatives and Just-in-time initiatives.
The models for buyer-supplier collaboration form the basis of most discussions on
implementation. The main implementation guidelines reviewed include the
implementation of operational links relating to design, logistics and quality. The more
complete implementation models include the model for Five phases in the
development and evolution of purchasing partnerships. The most complete models
are the portfolio management models to supplier relationship management which
includes contextual analysis as well as relationship analysis and implementation.
Portfolio management models were found to be the most applicable to application in
industries other than manufacturing.
The final part of this study applies the theory to mining equipment purchases. The
theory and application of buyer-supplier collaboration were developed for the
manufacturing industry and therefore several issues arise in the application of these
approaches in the mining industry. No significant literature was found relating to the
application of buyer-supplier collaboration to mining equipment purchasing strategies.
Applying the portfolio management approach to the mining equipment purchase and
suppliers, reveals that mining equipment purchases are strategic in nature and
buyer-supplier collaboration is the applicable management approach. Several areas
of possible value add were identified and include acquisitions costs, replacement
parts, efficiency and productivity of mining equipment.
The initial review of the implementation of buyer-supplier collaboration at a mining
operation reveals early performance improvements in terms of service levels. The
review also indicates the existence of some of the risks associated with this type of
relationship, mainly the shifting of inventory to the supplier.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/70659 |
| Date | 03 1900 |
| Creators | Roux, Marius T. |
| Contributors | Von Leipzig, K. H., Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Rights | Stellenbosch University |
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