Comparison of performance measurement in different purchasing and supply management practices

Abstract

PurposeThe purpose of this paper is to compare the characteristics of performance measurement in cross-functional and supplier-oriented purchasing and supply management (PSM) practices. It clarifies the purposes and content of performance measurement in three PSM practices.Design/methodology/approachA multiple case study approach is utilized in this study. Each of the cases is related to a contemporary performance measurement development project during the period 2015–2016. Interviews are conducted to obtain a pre-understanding of the research questions at hand. The case studies continue as an action research including measurement development workshops.FindingsIdentification of causalities between measurement objects and the measurement value benefits are contemporary issues of performance measurement development in the PSM context. The findings indicate that the measurement of outputs and outcomes instead of inputs and measurement supporting supplier relationship management is increasingly important in the service context. Measurement purpose affects the characteristics of PSM performance measurement. This study identifies that more informal control and non-standard measures are needed in interactive PSM practices such as cross-functional integration.Research limitations/implicationsThe study provides practical examples of performance measurement in service purchasing, classifies the characteristics of performance measurement and highlights the need to extend the scope of measurement in the PSM context. The findings of the case studies reported support practitioners in developing performance measurement that satisfies contemporary managerial needs.Originality/valueEarlier studies are often not explicit with the purpose of performance measurement. This study contributes to the existing literature by linking performance measurement characteristics to the understanding of PSM practices and providing a wider overview of the varying characteristics of performance measurement supporting strategic purchasing of services.