Co-operation between different units to make the purchasing process of indirect material more effective

Abstract: Organisations must change in order to be able to follow the expansion in the world and be competitive along with other organisations at the global market. To successfully efficient the organisations reduce their purchasing costs for material and products. One way to reduce the purchasing costs is to centralise all purchases in an organisation. When a big organisation does that, they use, among other things, the economies of scale. (Personal communication,Department Manager, 2005-06-17 and Senior adviser, IMS ITP, 2005-08-15) While studying Information Logistics, 140 p, at the Centrum för Informationslogistik in Ljungby, has IKEA IT been our co-operating company. When we talked with our Department Manager during our internship, she describes co-operation problems between the units when they purchase IT-related indirect material. Indirect material is products that support the daily work within the organisation. Since IKEA recently started a central purchasing function for indirect material our assignment was to see how IKEA could be more efficient when purchasing IT-related indirect material. Different units at IKEA are involved during central purchases of IT-related indirect material. The fact that many conflicts arise when different units are to co-operate is well known (Gadde & Håkansson, 1998). We found this very interesting and therefore our chose of subject. The co-operation conflicts that have arose during our investigation shows clear signals in the theory about why they arise. According to Danermark (2000) it is more a rule than an exception that it anticipates a competition. Different occupational groups have different prestige and power, the bigger the difference is the bigger is the probability that a problem regarding co-operation arise. One difficulty with centralized purchases is to get the different units at the organisation to co-operate. Co-operation problems could be caused by many factors for example did the different units use different terminologies and could therefore be misunderstood.(Gadde & Håkansson, 1998) Unique for IKEA’s organisation is that all different units work against the same business concept, goal and vision (Personal communication, Senior adviser, 2005-08-15). As long as the involved units are independent and do not have identical purposes will there always be conflicts (Gadde & Håkansson, 1998). Heide, Johansson and Simonsson (2005) considers that the visions are build up on different goals. These goals are in its parts build up on a number of strategies. All IKEA-units struggle towards the same vision and goal, but the different units use different strategies to reach the goals. This different strategy creates conflicts when the different IKEA-units should co-operate. To make the most optimized purchase for IKEA should the purchasing department handle the contacts with the suppliers (Personal communication, Purchase Process Manager, 2005-08-27). That generates a conflict when the other involved units also want to make the first contact (Personal communication, Process Owner, 2005-09-07 and Project Manager 2005-09-23). One problem is that the purchasing department today have a lack of resources and do not have time to handle all purchases and delegate some purchases to the other involved units. This gives a double message about how IKEA want the purchasing process to work.