Quitt Measuring Supply Management’s Budget Effects

Introduction of Return on Spend as an Indicator of Supply Management’s Financial Effectiveness
2010
ISBN: 978-3-8349-8490-6
Verlag: Betriebswirtschaftlicher Verlag Gabler
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 250 Seiten, eBook

Reihe: Einkauf, Logistik und Supply Chain Management

Based on practice-oriented and practice-relevant research methods, Anna Quitt, designs an integrated process for measuring supply management's budget effects and develops Return on Spend as an innovative financial effectiveness indicator.

Dr. Anna Quitt was a research assistant at the Chair of Financial Supply Management of Prof. Dr. Michael Henke and obtained her doctoral degree at the European Business School EBS in Oestrich-Winkel.

Zielgruppe

Research

Autoren/Hrsg.

Quitt, Anna

Weitere Mitwirkende

Henke, Prof. Dr. Michael

Inhaltsverzeichnis

1;Foreword;6
2;Preface;8
3;Overview;9
4;Table of Contents;11
5;Index of Appendixes;14
6;List of Figures;15
7;List of Tables;18
8;List of Abbreviations;19
9;1 Problem Set and Course of Investigation;21
9.1;1.1 Supply Management’s Bottom Line Impact – A Never Ending Issue?;21
9.2;1.2 Objectives and Research Questions of his hesis;25
9.3;1.3 Course of Investigation;26
10;2 Supply Management’s Financial Effectiveness – ‘The Story Behind it’;29
10.1;2.1 Supply Management’s Role and Corporate Value Contribution;29
10.1.1;2.1.1 Effective Supply Management – Key for Becoming an Equal Business Partner;30
10.1.2;2.1.2 Purchasing Performance Versus Performance of Purchasing – A Modified Understanding of Supply Management’s Value Contributi;33
10.1.3;2.1.3 Different Issue, Participants, and Interests – A Principal Agent Perspective;37
10.2;2.2 Supply Management’s Financial Effectiveness – Return on Spend;40
10.2.1;2.2.1 Discussion of Different Performance Management Systems as Potential Role Models for Supply Management’s Effectiveness Indicator;40
10.2.2;2.2.2 Discussion of Different Financial Performance Indicators as Potential Role Models for Supply Management’s Financial Effectiveness Indicator;45
10.2.3;2.2.3 Supply Management’s Budget Effects as Refined Savings and Basis for Financial Effectiveness Measurement – An Integrated Budgeting Approach;55
10.3;2.3 Design Implications for Measuring Supply Management’s Budget Effects;64
10.3.1;2.3.1 Process-Related Implications – A First Draft of an Integrated Budget Effects Measurement Process;64
10.3.2;2.3.2 Organisational Implications – The Consideration of Soft Factors Within the Context of Change;69
10.3.3;2.3.3 Research Design and Process from the Design Sciences Perspective;71
10.4;2.4 Interim Result: Return on Spend as Newly Defined Indicator of Supply Management’s Financial Effectiveness;80
11;3 Measurement of Supply Management’s Bottom Line Impact: Status Quo and Future Requirements;82
11.1;3.1 Quantitative Methodology;82
11.1.1;3.1.1 Questionnaire Design;83
11.1.2;3.1.2 Data Collection;85
11.1.3;3.1.3 Sampling;86
11.2;3.2 Status Quo of Savings Measurement Practices;87
11.2.1;3.2.1 Sample Characteristics;88
11.2.2;3.2.2 The Relevance of Measuring Supply Management’s Bottom Line Impact;89
11.2.3;3.2.3 Current Savings Measurement Practices;91
11.3;3.3 Requirements for Supply Management’s Budget Effects Measurement;98
11.3.1;3.3.1 Components’ Relevance for an Adequate Measurement Approach;99
11.3.2;3.3.2 Dependence of Measurement Certainty on Specific Measurement Components;102
11.3.3;3.3.3 Design Implications of the Survey Results for the Measurement Approach – A Second Draft of an Integrated Budget Effects Measurement Process;104
11.4;3.4 Interim Result: Existent Need and Preparedness for Advanced Savings Measurement in Practice;109
12;4 Measurement Process Design: Measuring Supply Management’s Budget Effects – A Qualitative Approach;112
12.1;4.1 Contextual Case Analysis;113
12.1.1;4.1.1 The Different, Applied Qualitative Methodologies;113
12.1.2;4.1.2 Identification of Contextual Issues in Practice to be Aware of in the Further Concept Establishment – A Contextual Exploration;123
12.1.3;4.1.3 Consolidation and Classification of the Different Relevant Contextual Issues;141
12.2;4.2 Integrated Planning and Budgeting as a First Step Towards Solid Budget Effects Measurement;150
12.2.1;4.2.1 Definition of Measurement Prerequisites – Design Rule 1;150
12.2.2;4.2.2 Outline of a Comprehensive Supply Planning Process – Design Rule 2;156
12.2.3;4.2.3 An Integrated Budgeting Approach – Design Rule 3;164
12.3;4.3 From Planning to Measurement – A Structured and Integrated Budget Effects Measurement Approach;174
12.3.1;4.3.1 Realisation and Monitoring – Design Rule 4;175
12.3.2;4.3.2 Measurement and Reporting – Design Rule 5;180
12.3.3;4.3.3 Process-Design Implications of the Case Study Research - The Final Draft of an Integrated Budget Effects Measurement Process;191
12.4;4.4 Interim Result: Five Design Rules as a Guideline for the Configuration and Functional Set-Up of the Budget Effects Measureme;193
13;5 Process Implementation Design: Implementing Supply Management’s Return on Spend;196
13.1;5.1 Definition of Measurement Process Requirements;196
13.1.1;5.1.1 One-Dimensional Requirements: Data or Process or Behaviour;197
13.1.2;5.1.2 Two-Dimensional Requirements: Data & Process & Behaviour & Data;200
13.1.3;5.1.3 Three-Dimensional Requirement: Data, Process, & Behaviour;202
13.2;5.2 Identification and Discussion of Measurement Process Inhibitors;202
13.2.1;5.2.1 Identification of Requirement Gaps – A Methodological Excursus;203
13.2.2;5.2.2 Requirement-Gap-Analysis – Requirements Versus Status Quo;203
13.2.3;5.2.3 Discussion of Inhibitors – Data, Process, & Behaviour;205
13.3;5.3 Analysis of Measurement Process Enablers – Management Implications;212
13.3.1;5.3.1 Corporate Enablers;212
13.3.2;5.3.2 Supply Management-Specific Enablers;214
13.3.3;5.3.3 Implementation Process – Design Rule 6;216
13.4;5.4 Interim Result: One Design Rule as a Guideline for the Implementation and Organisational Set-Up of the Budget Effects Measurement Process;221
14;6 All-Encompassing Final Statements;224
14.1;6.1 Limitations of Research;224
14.2;6.2 Future Research;225
14.3;6.3 From Planning to Measurement – Six Design Rules as Guidance for a Solid Measurement Approach of Supply Management’s Budget Effects;226
15;Reference List;233
16;Appendix;255

Problem Set and Course of Investigation.- Supply Management’s Financial Effectiveness – ‘The Story Behind it’.- Measurement of Supply Management’s Bottom Line Impact: Status Quo and Future Requirements.- Measurement Process Design: Measuring Supply Management’s Budget Effects – A Qualitative Approach.- Process Implementation Design: Implementing Supply Management’s Return on Spend.- All-Encompassing Final Statements.

Leseproben

4 Measurement Process Design: Measuring Supply Management’s Budget Effects – A Qualitative Approach (S. 92-93)

Finding creative problem solutions and thereby acting future-oriented as a vehicle for change, as discussed by several authors (e.g. Borja de Mozota, 2007; Lojacono & Zaccai, 2004; Michlewski, 2008; Ravasi & Lojacono, 2005; Romme, 2003), has been the reason for selecting design sciences as the research strategy for this thesis. The second draft of the savings measurement framework has already been detailed and incorporates the literature as well as practice perspective.

However, it remains theoretical; or as Mintzberg (1979, p. 587) says: “It is the anecdotal data that enable us to do the building. Theory building seems to require rich description, the richness that comes from anecdote.” The existence and relevance of the problem of measuring supply management’s RoS and budget effects has been proven.

A generic measurement approach has been designed, expressed through six design propositions. However, to advance theory building and to provide more specific answers to more specific practice problems – to be more concrete – the framework must be validated and substantiated through qualitative data from practice. Thereby, it is the objective to substantiate the six so far developed design propositions and turn them into general design rules by achieving a higher degree of detail. The following research questions hence need to be investigated:

- Which contextual issues influence the budget effects measurement process in practice?
- How do the single measurement process steps have to be designed to take care of these contextual issues and to achieve reliable measurement results?

To answer these research questions, an exploratory research approach was selected. Yin (2003, p. 23) compares exploratory case studies with an exploration itself, which requires preparation and direction. This rationale is provided through the pre-defined measurement framework and the design propositions. By means of five different case companies, which were analysed with different methodologies, the practice context is investigated in 4.1. Which challenges companies face when trying to measure bottom line effective savings and which deficiencies occur are explored. The different contextual issues were allocated to the respective design proposition to approach those problem-focused.

Thereby, it became obvious that there are process-related as well as organisational-related contextual issues. Since the latter apparently played a significant role in implementing the budget effects measurement process successfully in the long term, they are treated separately in detail in Chapter 5. In 4.2 and 4.3, which are dedicated to the first five design propositions, the entire budget effects measurement process is designed based on experiences and best practice obtained from discussions with practitioners and observations within the case companies.

Each proposition is advanced into a design rule, which lists several possible interventions for supply managers to approach the contextual issue in order to reach their particular measurement objective. By applying this structure, the CIMO-logic is maintained throughout the entire design process. In summary, the design rules can be considered as guidelines for supply managers when setting up and eventually implementing a corporate measurement process for supply management’s budget effects.

Über Autor(innen)

Dr. Anna Quitt was a research assistant at the Chair of Financial Supply Management of Prof. Dr. Michael Henke and obtained her doctoral degree at the European Business School EBS in Oestrich-Winkel.