Value‐driven purchasing of kitchen cabinets in industrialised housing

Abstract

Purpose – The purpose of this paper is to hypothesize that value-driven purchasing of customized kitchen cabinets is more profitable than market-driven purchasing in industrialised housing construction. The hypothesis is examined through a case study of kitchen carpentry at one of the Sweden's largest producers of industrialised prefabricated multi-storey housing. By comparing characteristics of market- vs value-driven purchasing, this paper aims to further clarify the benefits and drawbacks of these two strategies. Design/methodology/approach – By comparing characteristics of market- vs value-driven purchasing, a theoretical framework is proposed that clarifies the benefits and drawbacks of the two strategies. An explorative case study of kitchen carpentry at a house manufacturer illustrates purchasing of kitchen cabinets in the industrialised housing industry in relation to the proposed framework. Findings – The case study results indicate that, from a value perspective, a long-term relationship with a dedicated local smaller supplier is a preferable choice over a short-term relationship with a low-price mass producer. Research limitations/implications – This is a single case study that should be verified by further empirical work of a test delivery from the local sub-system manufacturer. Such a study would provide more insights into this area of work and make it possible to thoroughly evaluate potential risks. The indicative results in this paper can be made conclusive through quantification of the proposed lean purchasing characteristics. Originality/value – A comparison of value- and market-driven purchasing is carried out in theory and applied to a real case study that brings new perspectives to purchasing. In this way, the paper proposes alternative purchasing strategies to the construction industry.

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