The Purchasing Function - a Catalyzer to Breakthrough Innovation

Issue of Study: Today purchasing plays an important role when it comes to innovation and in the future it will be even more important for firms to have well-functioning purchasing departments. As the opportunity to outsource some of the production components’ rise, the pressure on the purchasing department to contribute to innovation will increase. The question is how a procurement department can contribute to a company’s innovation. Purpose: The aim is to investigate how and to what extent a purchasing department should work to support its company's innovation. Method: Data was collected through semi-structured interviews with purchasers and innovation employees at eleven case companies. For the frame of reference, academic articles and industry journals were studied. Based on both the theoretic and empirical data, a framework was developed. Conclusions: The study verifies that the procurement department is able to contribute to innovation by adding value which can be used in the innovation procedure. To succeed they need to perform activities with internal and external parties and believe they have a responsibility to contribute. It is also needed to allow the suppliers to take part of companies’ innovations which should be encouraged by the purchasers