Effects of providing total cost of ownership information on attribute weights in purchasing decisions

Mind the perception gap

Purpose

A perception gap refers to the differences in perception among the stakeholders regarding any aspect of the supply chain relationship. The purpose of this paper is to investigate the perception gap among service supply chain partners relating to the relative importance of key performance indicators (KPIs) and the association of this gap with service performance.

Design/methodology/approach

This paper presents an integrative framework that combines statistical methods and data envelopment analysis for computing perception and performance gaps, and for identifying the association between the gaps. The study follows a middle-range theorizing research approach where general inferences are induced from instances, and a theory can be developed from the observation of empirical reality.

Findings

Analysis of data from a leading global insurance service supply chain suggests that perception gap exists and can be recognised as a factor associated with performance gaps. The results suggest that the perception gap not only affects performance but can also be tracked as a meta-KPI to improve performance throughout the service supply chain.

Practical implications

The key implication of the presented research is that service companies can identify and resolve the differences in perceptions regarding the importance of the KPIs, by methodologically computing the gaps and tracking them as meta-KPIs.

Originality/value

The study extends the theoretical boundary of supply chain performance management by introducing the perception and performance gaps as novel meta-KPIs. These meta-KPIs can be computed through the integrative framework developed in the study.

Savings measurement for capital equipment purchasing: challenges and conceptual model

Purpose

– Many companies are not satisfied with the methods used to calculate savings for capital equipment purchasing (CEP), and the existing academic literature does not provide adequate suggestions for solving this problem. Therefore, the authors will aim to analyze how companies measure savings for CEP and attempt to identify the main challenges in this area. In order to understand which savings measurement system for CEP is appropriate in a specific situation, they will explore the relevant determinants and effects of savings measurement for CEP.

Design/methodology/approach

– After presenting a description of the theoretical foundations of CEP and savings measurement, the article presents three cases of savings measurement for CEP from manufacturing industry and pinpoints the major challenges involved. These challenges are then discussed with reference to the relevant literature and a conceptual model for savings measurement for CEP is developed.

Findings

– The authors identify six procedure-specific and seven behavior-specific challenges. Procedure-specific challenges in savings measurement for CEP primarily address topics concerning components and calculation methods, while behavior-specific challenges mainly involve manipulation, trust and judgment. The authors’ formulated propositions state that savings measurement for CEP is influenced by internal and external determinants and affects CEP's performance, manipulation and trust, as well as judgments which may be made about CEP's savings measurement results.

Practical implications

– The managerial implications of the authors’ research concern the successful design and process of savings measurement for CEP.

Originality/value

– Savings measurement for CEP, as a special case of purchasing performance measurement, has received little attention in the academic literature. Thus, the authors will present calculation methods, along with identifying and discussing challenges and revealing relevant determinants and effects.