The implications of strategic purchasing decisions on the value chain

Abstract

Many multinational companies (MNCs) recognise that their ability to become world-class competitors is based on establishing high levels of trust and cooperation with their suppliers, particularly small and medium-sized enterprises (SMEs). This paper presents a fifteen criteria model which describes the purchased package in a partnership relationship. This model has been evaluated and the results have important implications for SMEs. Large companies are looking for suppliers who can play an important role in the value-adding network of the purchasing company by contributing, for example, to ongoing cost reduction programmes and reducing product development times.