The Impact Of Strategic Purchasing On The Supply Organizational Design In A Global Context

Among the increasing competition in global market, multinational companies begin to implement global sourcing strategy in order to capture competitive advantage on cost, quality, lead time, response to customer and financial market needs. Global sourcing as a purchasing strategy is characterized by two features: strategic orientation and operating in global market.Strategic purchasing is the process of planning, evaluating, implementing and controlling strategic and operating purchasing decisions for the purpose of directing all activities of the purchasing function toward opportunities consistent with the firm's capabilities in order to achieve its long-term goals. Especially, in the global market, strategic purchasing became different from traditional purchasing on four aspects: firstly, the role of purchasing shifted from an operational role to a strategic role; secondly, purchasing activities breaks function boundary and realize the cross-functional integration by working flow; thirdly, company began to establish long-term partnership with suppliers; lastly, company began to choose the most competitive source worldwide. However, all these changes drive new requirements of supply organizational structure.This article aims to discuss the influencing channel and effect of global sourcing on supply organizational design in the manufacturing multinational company. It studies from three perspectives: strategic management, supply chain management and organization design. This study also tries to reveal some new trends on supply organizational design which may be helpful to Chinese multinational companies that compete on global market. In this study, we conduct further observation and analysis from four aspects which consist of organizational design research area: organization structure, duty division, authority assignment, communication and coordination. Through the case study of a sourcing center in a typical manufacturing multinational company which implements global sourcing strategy, we finalize the following conclusions:1) Tridimensional organization structure becomes a new choice for the supply organization which implements strategic purchasing under global context.Tridimensional organization structure, on one aspect, can coordinate the purchasing activities worldwide and consolidate the material needs from different areas; on the other aspect, this structure will not sacrifice the response to the local plant and the flexibility to the supply chain. Moreover, it also considers the buying from product view and avoids separated perspectives. Therefore, tridimensional organization structure becomes a new possible supply organization structure for the big scale multinational company.2) Supply organization will pay increasing attention to the team-building and team-coordinating.Teams divided by products or material categories helps the purchasing staff to gain global views and enhance understanding and implementing of global sourcing strategy. Purchasing teams divided geographically promotes belongingness and self-recognition of the purchasing staff. Moreover, they improve their professional capabilities through team studying and experience sharing.3) Strategic purchasing staff become more powerful in the supply organization which implements strategic purchasing under global context.As previous studies revealed, chief purchasing officer occupies more critical position in the company and reports directly to the higher level director. Meanwhile, we also found out that greater power is obtained by strategic purchasing staff who are not only at senior level but also at middle level. They own more resources, more opportunities to learn and greater influence as experts. 4) Cross-functional, cross-locational and cross-organizational communication become more critical in the supply organization which implements strategic purchasing under global context.Strategic purchasing requires increasing communication among different functions. Under global context, strategic purchasing also needs supply organizations located in different areas to communicate and coordinate mutually. Moreover, breaking the boundary between organizations and increasing communication and cooperation with suppliers becomes a more popular supply organizational design feature in global sourcing companies.