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Strategic Procurement: A Review and Prospect

Article  in  International Journal of Procurement Management · January 2012

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452 Int. J. Procurement Management, Vol. 5, No. 4, 2012

Emerging issues of procurement management:

a review and prospect

Paul Hong
College of Business,
University of Toledo,
2801 Bancroft, Toledo, OH 43606, USA
E-mail: paul.hong@utoledo.edu

He-Boong Kwon*
School of Business,
Park University,
8700 NW River Park Drive,
Parkville, MO 64152, USA
E-mail: HeBoong.Kwon@park.edu
*Corresponding author

Abstract: Increasingly, procurement management is becoming a strategic

priority of firms for their sustainable competitive advantage in turbulent times.
In today’s dynamic market environment, procurement is positioned as a critical
integrative business process and its focus has been extended from short term
cost minimisation to long term value creation and delivery. In this paper, we
examine a major procurement literature and present a framework that suggests
evolving patterns of strategic procurement practices of firms. This review of
articles published in major journals about procurement management shows that
procurement literature has evolved from specialised functional orientation to
more integrative and strategic approaches. This article provides summaries of
the procurement literature in terms of its key dimensions and emerging
patterns. Future research issues are discussed.

Keywords: emerging procurement issues; procurement professionals; strategic

procurement practices; prospect; review; procurement management.

Reference to this paper should be made as follows: Hong, P. and Kwon, H-B.
(2012) ‘Emerging issues of procurement management: a review and prospect’,
Int. J. Procurement Management, Vol. 5, No. 4, pp.452–469.

Biographical notes: Paul Hong is a Professor of Information Operations and

Technology Management at the University of Toledo, USA. He holds a PhD in
Manufacturing Management and Engineering from the University of Toledo.
He also holds an MBA and an MA in Economics from Bowling Green State
University, USA and BA degree from Yonsei University in Seoul, Korea. His
articles have been published in journals including Journal of Operations
Management, International Journal of Production Research, Journal of Supply
Chain Management, and International Journal of Production Economics. His
research interests are in innovation and global supply chain management.

Copyright © 2012 Inderscience Enterprises Ltd.

 Emerging issues of procurement management 453

He-Boong Kwon is an Associate Professor of Management at Park University,

USA. He holds a Doctoral and an MS in Electrical Engineering from Florida
Institute of Technology and a BS from the Korean Air Force Academy. He also
took MBA coursework from Pacific Lutheran University, and completed
the AACSB-endorsed Post-doctoral Bridge to Business programme at the
University of Toledo. He had established his career in operations, logistics, and
program management by assuming various managerial positions throughout his
tenure in the Korean Air Force and Samsung-Thales Company in Korea. His
articles have been published in journals including Benchmarking: An
International Journal, European Journal of Innovation Management, and
International Journal of Logistics Management. His research interests include
global operations and supply chain management, performance measurement,
and innovation management.

This paper is a revised and expanded version of a paper entitled ‘Emerging

procurement issues: a research perspective’ presented at the 4th International
Supply Chain Management: Symposium and Workshop in Madrid, Spain,
22–24 September 2010.

1 Introduction

Traditionally, the focus of procurement has been efficient purchasing activities. Firms
regard low cost purchasing of quality materials or component parts or finished products
as an important function of procurement (Nollet and Beaulieu, 2003; Schiele, 2007).
However, today’s dynamic market environment and intense competition drive all types of
organisations to be more innovative in introducing new products and services fast to
market and requires high level of flexibility in meeting changing customer requirements
(Barragan et al., 2003; Doll et al., 2010; Hong et al., 2009; Roh et al., 2011).
Increasingly, the source of sustainable competitive advantage does not come from one or
two areas of excellence. Rather, it is derived from outstanding practices in key strategic
areas that are linked to the overall business processes. As market environment becomes
more turbulent with rapidly changing customer requirements, the nature of goods and
services is more complex and product life cycle is getting shorter. Increased product
complexity and shorter product life cycle requires a wide range of innovative component
parts and services that make procurement more challenging and costly. Since the portion
of procurement is as large as 70% or more of total cost of goods sold in some industries,
management needs to take effective procurement as strategic priority (Anderson and
Katz, 1998; Barragan et al., 2003; Ryals and Rogers, 2006). Therefore, traditional
back office purchasing function has been evolved to be more cross functional and
inter-organisational business processes. Thus, increasingly procurement is becoming a
key strategic business process from a transaction-based practice to the most of the
business firms (Carter and Yan, 2007; Porter and Kramer, 2011; Ryals and Rogers,
2006).
Yet, there is a great deal of ambiguity in regard to the nature, scope and role of
procurement in this rapidly changing business environment. Prior research on
procurement has been quite fruitful in many aspects. In the inaugural issue of
International Journal of Procurement Management, Gunasekaran (2007) broadly defined
the scope of procurement including sourcing, supply management, purchasing, supplier
454 P. Hong and H-B. Kwon

development and innovation, and performance management. The aim of this paper is to
examine how research on procurement has evolved over the years. For this purpose, we
explore the following questions:
1 What scope of procurement topics are covered in the major journals of operations/
supply chain/ purchasing/ procurement management?
2 What is the emerging emphasis of procurement practices?
3 What are the key factors for effective procurement?
4 What are the future research areas for the procurement?
To answer the above questions this paper examines the papers published in major
journals – particularly International Journal of Procurement Management, Journal of
Purchasing and Supply Management, Supply Chain Management: An International
Journal, Journal of Supply Chain Management, Journal of Operations Management,
International Journal of Production and Operations Management, Strategic
Outsourcing: An International Journal – about procurement management and categorises
them into subject areas. The selection criteria are
1 articles with procurement in their title
2 procurement as a key word.
The assumption is that procurement is apparent only if the article mentions procurement
either in the title or in the key word. Otherwise, procurement is a fairly small element in
the article. We then classified these articles by possible broad topics. The paper is
organised as follows. The next section first discusses
1 changing perspectives of procurement
2 emerging emphasis on effective procurement management
3 key research dimensions for effective procurement.

2 Changing perspectives of procurement

In conventional procurement practices, maximising the bottom line profits through

cost minimisation has been a critical indicator for the successful business outcome,
consequently, business firms stay vigilant on the cost structure. With the cost
consciousness, firms place an emphasis on strategic cost reductions through their
suppliers (Barragan et al., 2003; Busi and McIvor, 2008). However, increased product
complexity and time-based competition require innovative parts and components that
make cost a challenging issue. In this innovation driven market environment, no single
company has enough skill sets to fulfil timely demand, hence, procurement tends to be
more dependent on efficient supply chain management (Andersen and Rask, 2003;
Schiele, 2007; Williamson, 2008). Thus, in response to the changing market environment,
there have been some noticeable changing patterns. Figure 1 summarises a changing
perspective of procurement.
 Emerging issues of procurement management 455

Figure 1 Changing perspective of procurement: 1970s–2010 and beyond

Inter-organisational coordination and

integrative processes for enhancing the
total value of procurement processes

Cross-functional collaboration and

concurrent process by various
departments coordinated by central
Emerging Patterns
procurement function
of Procurement in
2000s:
Functional specialisation Strategic network
and sequential process by capability
purchasing department Procurement in
1980s–1990s:
Support for
cross-functional
business efforts
Procurement
prior to 1970s:
Purchasing for
cost and quality
management Procurement beyond 2010:
A new model for strategic
procurement for sustainable
competitive advantage

Strategic network process and integrative collaborative value

chain management by strategic business unit for creating and
delivering shared values for sustainable competitive advantage

Apparently, procurement concept has been evolved to incorporate long term goals and
adapted to changing business paradigms. Prior to 1970s, procurement was simply a
specialised back office function which supports sequential business functions and
separate departments. In this era, procurement requires a strong purchasing function over
suppliers’ interest and arm’s length relationship was a commonly accepted practice. In
1980s and 1990s, concurrent business process required intra-organisational collaboration
placed procurement function in a central position and supported cross functional efforts.
In response to more dynamic and competitive market environment, procurement
practices become more complex. With increasing availability of broad scope of
outsourcing, procurement function requires not only cross functional integration but
also a high level of inter organisational integrative processes. Accordingly, emphasis on
inter-organisational relationship building has become an important issue and procurement
has emerged as a strategic business practice for sustainable competitive advantage.
456 P. Hong and H-B. Kwon

3 Emerging emphasis on effective procurement management

In this section, we review areas of emerging emphasis on today’s procurement practices.

As aforementioned, a traditional purchasing has evolved into strategic procurement for
competitive advantage. Thus, the scope of procurement is extended from firm level to
inter-organisation level, supplier-base is being extended to cover global regions, and
collaboration-based effective governance mechanism covers multiple layers of supplier
networks. From this perspective, effective procurement management leads to the end
customer satisfaction by streamlining supply chains. Procurement concept is in a
transition from a short term profit orientation to a core business strategy that is related to
sustainability. Table 1 categorises six emerging areas of emphasis in today’s procurement
practices in terms of:
1 strategic procurement
2 global sourcing
3 supplier relationship
4 sustainability
5 public procurement
6 procurement in services sector.

3.1 Strategic procurement

As firms’ supply chain become longer, two clear trends have been emerging.
1 Each firm has smaller contribution for its finished products. Thus, value creation is
based on what others have already done (i.e., the procurement components) than
what it does within for value creation and delivery.
2 Competitive advantage depends on greater value delivery.
This necessitates more intensive product and process innovation. Prajogo et al. (2008)
shows that procurement is one of key value chain processes which significantly impact
quality and innovation regardless of a firm’s strategic direction in their empirical study
on Australian firms. In fact, suppliers as key strategic partners require good
understanding of their customer’s business processes and needs. Greater innovation
potential involves open and timely information sharing (Henke and Zhang, 2010).
This requires organisation-wide efforts of sourcing and procurement planning and
implementation (Baier et al., 2008; Cousins and Spekman, 2003; Prajogo et al., 2008).
Better coordination among cross-functional departments result in effective procurement
decisions and outcomes. Thus, long-term strategic procurement planning involves both
senior management and functional specialists in the areas of marketing, purchasing,
operations and distribution as well (Paulraj et al., 2006; Tassabehji and Moorhouse,
2008).
Dimensions Definition Implementation Implications
Strategic Procurement as a source of achieving Procurement should be implemented in a way to Long term value supersedes short term profit and Table 1
procurement competitive advantage. introduce synergy effect by introducing product and procurement is a core business process to
process innovation. incubate innovation.
(Anderson and Katz, 1998; Barragan et al., 2003; Busi and McIvor, 2008; Carter and Yan, 2007; Cousins and Spekman, 2003; Ogden et al., 2005;
Oke et al., 2009; Paulraj et al., 2006; Prajogo et al., 2008; Prasad and Sounderpandian, 2003; Sanderson and Cox, 2008; Niezen and Weller, 2006;
Swafford et al., 2006; Zeng, 2003)
Global sourcing To extend procurement activities to overseas by Supplier base has been extended to cover geographic Procurement requires global awareness and
seeking resources and expertise. locations in a global level country specific factors trade-off analysis on benefit and risk.
should be taken into consideration.
(Lacity et al., 2008; Li and Barnes, 2009; Williamson, 2008; Lowson, 2002; Min and Galle, 1999; Oke et al., 2009; Ramingwong and Sajeev, 2007;
Ruamsook et al., 2009; Selen and Ashayeri, 2008; Weber et al., 2010; Zeng, 2003)
Supplier To select, maintain, and develop reliable Coordination based long term supplier relationship is Supplier as a strategic partner requires enhanced
relationship relationships with promising suppliers. necessary and it requires collaboration based virtual governance system which enables supplier
control on multiple tier suppliers. management.
(Alaez-Aller and Longas-Garcia, 2010; Busi and McIvor, 2008; Choy and Lee, 2003; Cousins and Spekman, 2003; Jung and Lee, 2006; Loader, 2010;
Mesquita and Brush, 2008; Min et al., 2005; Narayanan and Raman, 2004; Olsen et al., 2005; Parker and Hartley, 2003;
Paulraj et al., 2006; Smart and Harrison, 2003; Zaharieva et al., 2003; Zeng, 2003; Parker et al., 2008)
Sustainability To achieve ethical and sustainable business by In light of growing concern on sustainable business Green purchasing, and supplier and customer
creating a new product and/or by adding value and environment friendly products, procurement can engagement in early product development stage
to existing products. initiate the process by satisfying stakeholders. lead to value addition, which eventually
Emerging issues of procurement management

contribute to long term profit.

(Handfield et al.,1997; Hong et al., 2009; Joo et al., 2010; Murray, 2000; Brown, 2008; Preuss, 2009; Walker and Brammer, 2009;
Walker and Phillips, 2009; Yang et al., 2011)
Procurement in Procurement by government entities which Balanced approach between cost and governance Public procurement is a source innovation and
public sector have leveraging power for market impact and needs to be in place. efficient public and private sector relationship
knowledge creation. should be established.
(Ancarani and Capaldo, 2005; Essig and Batran, 2005; Caldwell et al., 2005; Csaki and Gelleri, 2005; Mateus et al., 2010; Graham and Hardaker, 1998;
Purchase et al., 2009; Lawther and Martin, 2005; Lian and Laing, 2004; McCrudden, 2004; Parker and Hartley, 2003; Schiele, 2005; Schiele and McCue,
Changing emphasis of effective procurement practices in 2000–2010

2006; Tassabehji et al., 2006; Zheng et al., 2008; Zitron, 2006)

Procurement in Procurement of services such as healthcare, Managing complex relationship between buyer and Performance from service outsourcing should be
services sector consulting, and other business processes from supplier relationship becomes more important. carefully measured.
(e.g., government, suppliers.
healthcare and (Ancarani and Capaldo, 2005; Brege et al., 2010; Chandra, 2008; Lawther and Martin, 2005; Li and Choi, 2009; Schiele, 2005; Schiele and McCue, 2006;
hospitality) Zitron, 2006)
457
458 P. Hong and H-B. Kwon

3.2 Global sourcing

Offshore outsourcing in today’s business and the scope of outsourcing covers virtually all
areas of business functions including manufacturing, product services, human resource
management, and research and development (Carter and Yan, 2007). Firms concentrate
on their core capabilities, reduce staffing levels, reduce management problems, and
improve manufacturing flexibility through various types of outsourcing. In this context,
procurement deals with contradictory nature of business decisions such as make vs. buy,
control vs. flexibility, unit cost vs. total cost of ownership, and benefit vs. risk.
Among many underlying drives for procurement outsourcing, firms strive to search
for the best price or seek efficient ways of acquisition from outside sources. With the
growth of globalisation and international trade, easy access to low cost resources from
overseas makes global sourcing as an important stream in procurement practices.
However, global sourcing also carries risk in the form of hidden cost or tradeoffs which
include transportation and logistics costs, delivery performance, service quality,
production capacity, and other business factors (Lowson, 2002; Ramingwong and Sajeev,
2007). Macro factors such as logistics infrastructure, country specific elements including
politics, culture, geographic locations, and administration systems also impact on
sourcing performance (Min and Galle, 1999; Oke et al., 2009; Ruamsook et al., 2009).
When it comes to innovative product, outsourcing can be a source of innovation.
From this perspective, advanced economies such as western European countries and
Japan might be attractive location for outsourcing destination. Companies outsource to
those countries by seeking knowledge, expertise, and higher quality and standard (Oke
et al., 2009). In summary, global sourcing include much broad sets of business process
oriented issues such as supplier selections, international negotiation, coordinative
mechanisms in procurement research (Busi and McIvor, 2008; Carter and Yan, 2007;
Zeng, 2003).

3.3 Supplier relationship

Increasingly, cost is no longer the most important order qualifier, especially, for the
technology oriented innovative products (Choi and Hartley, 1996). Firms achieve cost
efficiency and improve quality and order fulfilment through effective supplier selection
(Ellram and Krause, 1994; Oke et al., 2009). Besides, sound supplier relationship as a
whole is important for a competitive edge and overall cost performance of the network
rather than a focal company is considered critical for the satisfaction of customers
(Alaez-Aller and Longas-Garcia, 2010; Gattiker et al., 2007; Lambert and Cooper, 2000;
Sandberg, 2007). For this, inter-firm information sharing and intra-firm resources
deployment aims to achieve synergy and by distributing risks (Min et al., 2005).

3.4 Sustainability
Environmental concerns and government regulations demand organisations both in
private and public sectors to achieve high level of green commitment. Green oriented
procurement is a proactive strategic initiative to promote sustainable business outcomes
which is far beyond traditional process improvement concepts (Brown, 2008; Handfield
et al., 1997). Firms also have taken sustainability into a prime consideration in their
operational level as well (Walker and Brammer, 2009; Walker and Phillips, 2009; Yang
 Emerging issues of procurement management 459

et al., 2011). Accordingly, purchasing firms turned their focus from low cost purchasing
to enhanced customer satisfaction by adding more values on their product, and a firm
with green orientation is translated into developing environmentally sound products in
today’s competitive market environment (Hong et al., 2009; Zhua and Sarkis, 2004).
Green sourcing is also considered an important sustainable procurement practice.
Joo et al. (2010) empirically showed that socially responsible sourcing practices can
result in significantly better performance than other competitors in their study on
specialty coffee companies.

3.5 Procurement in public sector

Aforementioned green purchasing, more broadly sustainable procurement is not limited
to private sectors but local and central government entities utilise public procurement
functions to support environment-friendly social culture (Murray, 2000; Walker and
Brammer, 2009). US government sectors alone spend enormous amount procurement for
supporting military defence, social services and infrastructure development and
constructions (Apgar and Keane, 2004). With their huge budget allocation and
purchasing capacity, these governmental procurement policies and processes affect the
broad patterns of procurement practices. Thus public procurement policies play a key
driver for improving manufacturing and services and promoting a wide range of
innovation activities (Lawther and Martin, 2005; Lee, 2008; Walker and Brammer,
2009).
With the growing importance of public procurement and its impact on social and
economic dimensions, emphasis needs to be put on building a sound partnership between
public and private entities (Essig and Batran, 2005; Parker and Hartley, 2003; Zitron,
2006). Raymond (2008) suggested four key principles in public procurement practices as
value for money, ethics, competition, transparency, and accountability.

3.6 Procurement in services sector

With the growing emphasis on services, service procurement and outsourcing is not a
new practice any more. However, despite the increasing importance, little effort has been
made therefore more study needs to be done by addressing service specific features
(Ellram et al., 2004). Unlike manufacturing procurement where steady intermediary role
exists, in a service outsourcing, dynamic relationships and mechanisms exist between
entities which eventually make service procurement challenging (Li and Choi, 2009).
With the increasing demands of affordable quality care of all populations both in
advanced and emerging global economies, the procurement needs in healthcare have
increased (Lian and Laing, 2004). Service sector procurement such as consulting and
healthcare services is getting more complex and provides heavy task to the purchasing
managers (Lian and Laing, 2004; Schiele and McCue, 2006). Especially in public service
procurement organisations, service providers should be conscious on satisfying diverse
stakeholder groups by maximising efficiency on their procurement of necessary goods
and services (Brege et al., 2010; Nollet and Beaulieu, 2003; Raymond, 2008). In this
sense, sets of high level of expertise and procurement knowledge are required for the
successful operation of service organisations (Chandra, 2008; Lawther and Martin, 2005).
Dimensions Definition Implementation Implications
460

Purpose of To identify, understand, and assess procurement Understand organisational goals and streamline Environmental scanning and understanding Table 2
procurement practices to implement a new model for strategic the procurement process in a way to achieve organisation’s competitive priorities are important.
procurement for sustainable competitive advantage. effective outcome. Long term value chain analysis Procurement impact on organisation’s
needs to be done. competitiveness.
(Baier et al., 2008; Niezen and Weller, 2006; Ogden, 2005; Parker et al., 2008; Sanderson and Cox, 2008)
Scope of The extent to which procurement functions are Defining the scope (organisation, value chains, Analysis of horizontal and vertical dimensions of
procurement extended. It includes strategies, value chains, public or private entities) is of importance for the procurement is critical in implementing successful
processes, products, services, performance, culture, procurement practices should be optimised to procurement in a sense that procurement is a first
and so forth. address firm specific situations. step toward a new product and process
development.
(Brege et al., 2010; Ellram et al., 2004; Graham and Hardaker, 1998; Parry et al., 2006; Li and Barnes, 2009; Li and Choi, 2009; Ogden, 2005; Walker and
Brammer, 2009)
P. Hong and H-B. Kwon

Professional Organisational improvement and personal Personal and organisational development for Socio technical perspectives of procurement
development of development that enhances knowledge flow and efficient procurement practices by optimising practices need to be emphasised. Human factors are
procurement process improvement among members in various organisational factors. as important as technology adoption in
settings including team, organisation, and network. procurement practices.
(Andersen and Rask, 2003; Baier et al., 2008; Bartezzaghi and Ronchi, 2004; Burki and Buvik, 2010; Emiliani, 2000; Gattiker et al., 2007;
Huang et al., 2008; Lian and Laing, 2004; Nollet and Beaulieu, 2003; Pagell et al., 2010; Tassabehji, 2010; Tassabehji and Moorhouse, 2008;
Tazelaar and Snijders, 2004)
Technologies for Technologies that enable an organisation to To share resources, manage relationships, and The success of procurement requires having the
procurement collaborate, monitor, and evaluate at inter- and integrate dispersed skills and expertise together, it right technology in place that significantly affects
intra-organisational level. is necessary to implement right decision-making the performance of collaboration in a team,
tools, collaborative technologies, electronic organisation, and network level.
transactions, which will improve virtual control in
Five key research dimensions for effective procurement

procurement practices.
(Arnold et al., 2005; Bartezzaghi and Ronchi, 2004; Batenburg, 2007; Bendoly and Schoenherr, 2005; Bertolini and Carmignani, 2010; Cagliano et al., 2005;
Croom and Brandon-Jones, 2007; Essig and Arnold, 2001; Ronchi et al., 2010; Hannas et al., 2010; Karjalainen and Kemppainen, 2008; Min and Galle, 1999;
Ovans, 2000; Pearcy and Giunipero, 2008; Reunis et al., 2004; Teo et al., 2009; Schoenherr, 2008; Snijders et al., 2003; Tatsis et al., 2006)
Performance Measures that facilitate organisations to compare By measuring performance, organisations can Procurement performance can be measured from
measures of and contrast their procurement performance with assert managerial efforts toward the organisation’s multiple perspectives beyond financial numbers.
procurement the targeted ones. goals. Performance can be extended from firm End customer satisfaction is critical.
level evaluation to network level performance
measurement.
(Choy and Lee, 2003; Dumond, 1994; Ellram and Krause, 1994; Lawson et al., 2008; McIvor et al., 2009; Ryals and Rogers, 2006; Schiele, 2007;
Steensma and Corley, 2000; Vaidyanathan and Devaraj, 2008; Vereecke and Muylle, 2006; Zeng, 2003)
 Emerging issues of procurement management 461

4 Key research dimensions for effective procurement

In this section, five key research dimensions of effective procurement are identified.
Firms emphasise both efficiency (i.e., productivity) and effectiveness (i.e., strategic goal
congruence) of procurement. The focus of procurement efficiency is about cost
management of procurement. On the other hand, effectiveness of procurement is about
delivering the right types of procurement requirements at the right time (i.e., quality,
delivery, innovativeness, and social values). Integration of efficiency and effectiveness
requires firms to consider purpose, scope, professional development, technologies and
performance measures of procurement. Table 2 summarises these key dimensions.

4.1 Purpose of procurement for sustainable competitive advantage

Purpose of procurement is aimed at seeking both short term goals of an organisation and
long term competitive advantage. In this sense, procurement is both tactical for satisfying
current portfolio requirements and strategic for future value creation. In this dynamic
market environment, firm’s sustainable competitive advantage requires internal business
processes and external supply network capabilities. Future research may keep focusing on
the purpose of procurement in terms of organisational competitiveness and long term
survival. Thus, such purpose-driven research should further identify, understand, and
assess changing procurement practices to implement a new model for sustainable
competitive advantage (Baier et al., 2008; Niezen and Weller, 2006; Ogden, 2005; Parker
et al., 2008; Sanderson and Cox, 2008)

4.2 Scope of procurement: value creation and delivery

The scope of procurement is beyond traditional make or buy decision. It includes
strategy, process, product, and services both in public and private settings. In addition to
these categories, geographic location can be another important factor in determining the
scope of procurement. Global, national, and regional factors need to be analysed by
taking transaction cost into consideration (Brege et al., 2010; Ellram et al., 2004). Beyond
economics, cultural, social and political factors play an important role especially in global
procurement practices (Graham and Hardaker, 1998; Parry et al., 2006; Li and Barnes,
2009; Li and Choi, 2009; Ogden, 2005; Walker and Brammer, 2009).

4.3 Professional development of procurement

As the scope of procurement is enlarged, roles of procurement professionals also change.
Individuals in a purchasing organisation face demanding role in today’s procurement
practices. Procurement is more than technical function but strategic and organisational
processes (Andersen and Rask, 2003; Baier et al., 2008; Bartezzaghi and Ronchi, 2004;
Burki and Buvik, 2010). Procurement professionals are agents of promoting internal
coordination. They are also diplomats who establish trust-based relationship with external
partners (Huang et al., 2008). Therefore, professional development of individuals is
important as the organisational development for efficient and effective procurement
outcomes. Future research is to pay attention to how organisations recruit, train and
develop procurement professionals to assume technical, tactical and strategic
responsibilities (Schoenherr, 2008; Swafford et al., 2006). Procurement professionals
462 P. Hong and H-B. Kwon

desire to achieve their personal advancement goals and specific functionally oriented
responsibilities in terms of socio-technical task requirements, human resource
qualifications, and technological aptitudes (Emiliani, 2000; Gattiker et al., 2007; Huang
et al., 2008; Lian and Laing, 2004). However, the real goals of procurement professionals
are to enhance knowledge flow and process improvement among members in various
settings including team, organisation, and network and thus consistently improve
organisational processes and performance outcomes (Nollet and Beaulieu, 2003; Pagell
et al., 2010; Tassabehji, 2010; Tassabehji and Moorhouse, 2008; Tazelaar and Snijders,
2004).

4.4 Technologies for procurement

Achieving cost efficiency by simplifying processes and reducing waste of time and
resources has been a major concern in technology factors of procurement practices
(Arnold et al., 2005; Bartezzaghi and Ronchi, 2004). At the same time, optimised process
has been sought to facilitate innovation. As a consequence, technology adoption is
becoming a more widely accepted trend and gradual number of firms relies on
information technology (Bendoly and Schoenherr, 2005; Bertolini and Carmignani, 2010;
Croom and Brandon-Jones, 2007). E-procurement and B2B is a popular procurement
technology which shift transactions into virtual space (Ronchi et al., 2010; Hannas et al.,
2010; Karjalainen and Kemppainen, 2008). Technology adoption needs to be
implemented in a way not to diminish relationships which would have been achieved via
face to face transactions with procurement entities (Reunis et al., 2004; Ronchi et al.,
2010; Teo et al., 2009; Tatsis et al., 2006).

4.5 Performance measures of procurement

Measuring procurement outcomes is an essential step in a sense that procurement impacts
not only firms’ financial performance but also overall performance of a firm (Bartezzaghi
and Ronchi, 2004). Meanwhile, performance measurement in procurement is considered
increasingly challenging as procurement requirements become more complex (Choy and
Lee, 2003; Dumond, 1994; Ellram and Krause, 1994; Lawson et al., 2008). Overall cost
reduction throughout supplier coordination and impact of supply chain coordination and
alliance have been considered important procurement performance measurement (Baier
et al., 2008; Schiele, 2007; Vereecke and Muylle, 2006). On implementing an expanded
set of procurement practices, performance metrics should be carefully considered in
advance and measured in time (Ryals and Rogers, 2006; Schiele, 2007). Performance
measurement should be anchored on the realm that core competency comes from entire
supply network including a focal firm (Vaidyanathan and Devaraj, 2008; Vereecke and
Muylle, 2006). In brief, researchers in procurement should consider key research
dimensions in terms of purpose, scope, professional implications and technology use for
fruitful research.

5 Concluding remarks

With the Global Financial Crisis in 2008–2010 the role of government is quite active.
The budget allocations in the public sectors are rapidly increasing. Thus, the role of
 Emerging issues of procurement management 463

public procurement on the private sectors and the entire economy deserve more careful
reflection (Caldwell et al., 2005; Csaki and Gelleri, 2005; Raymond, 2008). As firms
move more toward open innovation and service network, effective procurement practices
for service supply chains, green supply chain issues and innovation outcomes will gain
more research attention (Ellram et al., 2004; Henke and Zhang, 2010; Murray, 2000;
Schiele, 2007). Procurement of small and medium enterprises will also receive more
research attention (Cagliano and Spina, 2002; Karjalainen, 2008). Maximum value
through procurement requires effective coordination of sourcing, purchasing or
distribution from the immediate suppliers or logistic services providers. Since, expanded
roles of procurement are to
1 stabilise the entire value chain
2 enhance shared values among the participants of these extended business networks
3 strategically approach integrative procurement practices for sustainable supply chain
competitive advantage.
In this respect, procurement function will continue to evolve as all forms of organisations
change according to the changing demands of their stakeholders. Accordingly, the nature
of procurement thus will be redefined to explore new frontiers as well.

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