An empirical study on the impact of standardization of materials and purchasing procedures on purchasing and business performance

Abstract

Purpose

Standardization of materials (i.e. replacement of several materials/components by a single component that has all the functionalities of the materials/components it replaces) is one important purchasing department decision. The primary objective of this study is to examine empirically the impact of standardization of materials and purchasing procedures (standardization in purchasing) on purchasing and business performance.

Design/methodology/approach

To address our research problem, a survey instrument was developed and a structural model was hypothesized and tested using structural equation modeling. Data were collected from a field research on a sample of 306 manufacturing companies in Spain.

Findings

The results of this research indicate that standardization in purchasing has a significant positive effect on both purchasing and business performance. Thus, standardizing materials and purchasing procedures is important and may help firms to meet their materials expenditure targets, and increase the quality of materials, on‐time delivery from suppliers, inventory performance, as well as business performance.

Research limitations/implications

One of the limitations of the study is that the use of a single key informant could be seen as a potential limitation of the study. The study was a cross‐sectional and descriptive sample of the manufacturing industry at a given point in time. A more stringent test of the relationships between standardization in purchasing and performance requires a longitudinal study, or field experiment.

Practical implications

The empirically validated positive relation of standardization in purchasing to firms' performance, such as that documented in this study, can be very useful for the managers who take the initiative in standardization to promote and obtain the resources needed for the adoption of standardization of materials and purchasing procedures. Standardization in purchasing has, as this study shows, much to offer firms that wish to improve their performance.

Originality/value

Because there is a lack of empirical evidence about the impact of standardization of materials and purchasing procedures (standardization in purchasing) on purchasing and business performance, this paper filled an important gap in the purchasing literature.

Citation

Sánchez‐Rodríguez, C., Hemsworth, D., Martínez‐Lorente, Á.R. and Clavel, J.G. (2006), "An empirical study on the impact of standardization of materials and purchasing procedures on purchasing and business performance", Supply Chain Management, Vol. 11 No. 1, pp. 56-64. https://doi.org/10.1108/13598540610642475