Supply-based strategies, human resource initiatives, procurement leadtime, and firm performance.

INTRODUCTION

Time-based strategies have been widely employed to achieve a variety of time-based performance goals. Such goals have typically included reductions in leadtimes for product development, product launch, manufacturing, and delivery.[1] For example, 3M reduced its new product development time from two years to two months, Motorola cut its production lead time for cellular phones from several weeks to four hours, and Johnson and Johnson has the top selling contact lens largely due to its rapid (three days or less) and reliable (99.99 percent on-time) delivery of disposable contacts.

Improvements in time-based performance are not limited to new product development, manufacturing, and delivery. For example, Levi Strauss reduced its reorder cycle time from nine weeks to four days resulting in lower costs, fewer stockouts, and higher flexibility.[2] This suggests that procurement leadtime is also an important dimension of time-based performance, even though it has received little attention in time-based literature.

The purpose of this research is three-fold. First, it examines the contribution of procurement leadtime (PTL) performance to overall firm performance using data from a large sample of companies in the automotive supply industry. Second, it examines the relationship between antecedents (or drivers) of procurement leadtime performance and procurement leadtime using data from the same sample of firms. Two major categories of antecedents are considered: (1) supply-based strategies; and (2) time-related "best practice" human resource (HR) initiatives. Finally, it investigates whether supply-based strategies and human resource initiatives interact in their effects on procurement leadtimes.

LITERATURE REVIEW

Procurement Leadtime and Overall Business Performance

Researchers have considered time-based competition relative to various stages of the overall value delivery system and have proposed a variety of measures to evaluate these different aspects of time-based performance. In the time-based competition (TBC) literature, five measures appear most frequently: