Central Purchasing at Stora Enso : A Survey of the Supplier Relations

University essay from Linköpings universitet/Ekonomiska institutionen; Linköpings universitet/Ekonomiska institutionen

Abstract:

The purpose of this study is to investigate the suppliers’ view of their relation to Stora Enso. The study focuses on the relation between the central purchasing unit of Stora Enso and the suppliers but also gives indications of how the overall interface between Stora Enso and the suppliers works. The purpose is explored through a number of research objectives, which are presented below.

Areas essential for the functioning of the central purchasing unit:

- The overall organisation of Stora Enso’s purchasing activities,

- Stora Enso’s cross-functional purchasing teams,

- The internal coordination and communication,

- The relational bonds between Stora Enso and the suppliers

Important goals and visions for the central purchasing unit:

- Minimising the Total Business Cost,

- Being an attractive partner to the suppliers

Currently discussed issues within the central purchasing organisation:

- The potential for closer cooperation between Stora Enso and the suppliers,

- The professionalism of Stora Enso’s purchasers

Stora Enso is well organised for purchasing but the centrally coordinated cross-functional teams are not working as well as they could. The internal coordination has improved lately but the central purchasing unit’s mission to optimise for Stora Enso as a whole often creates tension within the organisation, as a result of the mills being profit centres. The internal communication is not efficient, and the suppliers are strengthening their bonds with the mills by taking over the responsibility for certain information flows. The central purchasing unit and the cross-functional teams have the responsibility but not the authority to carry out their task of identifying and reducing the Total Business Cost. Stora Enso is an attractive customer for their suppliers, mainly because of the big volumes they represent. The current negotiation strategies are not advantageous for the introduction of collaborative supplier relations but other factors in the relation between the suppliers and Stora Enso speak strongly in favour for such a strategic change. When it comes to professionalism and business moral the suppliers give the central purchasing unit a very positive evaluation.

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