Since 2006 Skanska has been going through a purchasing transformation where the
purchasing department has grown from 30 to approximately 120 employees by the
beginning of 2008. The purchasing department is centred on category managers who
are responsible for relations with suppliers. The category managers at Skanska are
responsible for sourcing and management of the supplier base in one or more
purchasing categories. The category managers themselves do no actual buying, but
represent the suppliers’ formal contacts with Skanska at a strategic level. Purchases
are performed at the production level of the organisation. A handful of category
managers related to either material or services categories constitute a purchasing
group, which is managed by a purchasing group manager. The purchasing group
manager coordinates the group and is responsible for fulfilment of its goals and
objectives, as well as being responsible as category manager for one or two categories.
The category managers have been recruited both internally and externally and hence
have varying backgrounds.
At the time of the study, Skanska had few standardised methods of working with its
framework agreement suppliers, and because the category managers used different
supplier relation methods it had a divided approach towards its supplier base. As a
part of the restructuring process, efforts are now being made to identify how to
differentiate efficient contractor-supplier relationships.
Skanska’s view on efficient contractor-supplier relationships
Respondents were asked to freely explain the five most important criteria
characterizing an efficient contractor-supplier relationship. The groups of criteria
most frequently mentioned and therefore given the highest rank are presented in the
following. As the respondents were asked to describe what suppliers have to fulfil as
well as what contractors have to fulfil, the following section is divided into one part for
contractors and one part for suppliers. And, since the common understanding within
the organisation is that the differences between procurement of material and the
procurement of service are significant, presentation of the case study results are also
separated along these lines. Accordingly, the results are presented thus: the criteria
that material suppliers should fulfil, the criteria that service suppliers should fulfil, the
criteria that contractors should fulfil concerning material suppliers, and the criteria
that contractors should fulfil concerning service suppliers.
As the primary criterion for the material suppliers, quality was discussed
extensively with respondents generally agreeing that suppliers should have good and
reliable products, deliver on time, and have quality thinking through the entire supply
chain. Quality thinking, however, is not developed overnight and one of the
respondents claimed that: “It is really difficult for us (the contractor) to train a supplier
to quality thinking, this is something that the supplier needs to have by themselves”.
Second, in relation to total cost respondents generally felt that the total cost or value of
the product should be the primary focus rather than the price. The third criterion,
service to users (involvement), not only included suggestions that suppliers should
manage their maintenance well but also that they should provide alternative solutions
to problems and more efficient ways of using material and machines. For example, one
respondent managing large investments stated that: “The supplier needs an
organisation which is able to visit our construction sites to give advice on how to
use their product in the most efficient way”. The fourth area discussed was
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professionalism and concerned competence in both the product and the business
relationship. Understanding of the customer’s organisation and their demands was
also mentioned as a part of this criterion. One respondent said: “You (as a category
manager) do not need to be best friend with the supplier but you need to be able to
show our (the contractor’s) demands, and if the supplier does not think that our
demands will be successful, they should tell us”. Lastly, resources for and a positive
attitude to development work were pointed out to be an important criterion for an
efficient relationship, along with continuous improvement and a genuine will for
improvement from the supplier’s management and employees.