Comparing Western and Japanese Industrial Purchasing Linkages

Philip McCann
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Philip McCann: University of Reading

Chapter 1 in The Economics of Industrial Location, 1998, pp 5-15 from Springer

Abstract: Abstract Western industrial purchasing management techniques all originated in the mass-production system, and herein lies the basic fundamental difference between the Western and Japanese philosophies. The Western purchasing philosophy is historically based purely on the question of the minimisation of the delivered price of a product. For a particular input, businesses will buy inputs from whichever is perceived to be the cheapest source, wherever they happen to be located in the world, as long as the input product meets the minimum quality requirements. The relationship between a customer and a supplier is necessarily purely a short-term monetary one, and for this reason, firms will traditionally have multiple potential suppliers, who will then compete for business on a continuous-tendering basis. The issue of the location of a supplier is only important in as much as the source price of a product must fall by a sufficient amount as the delivery distance between a firm and its supplier increases, in order to ensure that the delivered price of the product is lower than for other suppliers at other locations.

Keywords: Linkage Length; Linkage Pattern; Kanban System; Japanese Industry; Purchasing Policy (search for similar items in EconPapers)
Date: 1998
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DOI: 10.1007/978-3-662-03702-7_2

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