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EE Lecture week 43 October 25, 2006

EE Lecture week 43 October 25, 2006. Ronald Batenburg. Agenda. Reflection on the group discussion meetings Collection and analysis of the EE-data Setting up the EE-paper The multiple choice exam of October 13 Next. Reflection on the Group Discussion Meetings. The introduction Who is who

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EE Lecture week 43 October 25, 2006

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  1. EE Lecture week 43October 25, 2006 Ronald Batenburg

  2. Agenda • Reflection on the group discussion meetings • Collection and analysis of the EE-data • Setting up the EE-paper • The multiple choice exam of October 13 • Next

  3. Reflection on theGroup Discussion Meetings • The introduction • Who is who • Presenting the context and models • The questionnaire modules • Managing content questions • Managing practical matters • The discussion • Issues • Using questionnaire results • Leading group discussions • The organization • Facilitation • Recording • Promises • Lessons learned

  4. Collection and analysis of the EE-data • From the Group Discussion Meetings • A: 5 respondents • B: 8 respondents • C: 8 respondents • D: 3 respondents • E: 8 respondents • F: 7 respondents • G: 9 respondents • Through other channels (mail, personal visits) • 17 respondents from: • Bas Tax • Tjing Lam • Senoaji Wijaya (2) • Antek Jaworski • Ka-Sing Chou • Jaden Liu • Jiann Haur Chok • Michel Wasmann • Diana Sidharta • Theodoros Levantakis • Niek Broer • Janus van Vuuren • Nick Janssen • Vincent Vonk • Joeri Terlouw • Ivo van der Sommen • Missing: • 3 Berenschot respondents • Others …? • Total as of October 25: • 65 respondents

  5. The EE paper • Take an the papers that were discussed during the EE (working) lectures (e.g. Muffatto & Payaro, 2004; Kim & Umanath, 2005) • Make use of our collective literature excel-base for references • Your paper serves two goals: • A scientific contribution (what can scholars learn from the data, theory, hypothesis, validation or analysis?) • A practical contribution (how can your respondent and other practitioners learn from the data and analysis?)

  6. Part 1 • Introduction • Why a paper on procurement – rationale, goals • Structure of the paper – what parts, sections • Theory • The WCP model – background, relation with other models • The strategic alignment model (Hendersen & Venkatraman, Tallon et al) • The business/IT alignment model (Turban, Scheper) • The WCP model – its elements and their interrelations • The WCP model – implications for procurement maturity and performance • The WCP model extended – the situational approach • Transaction costs theory (Williamson) • Resource based view of the firm (Barney) • Contingency theory (Porter) • Hypothesis • What does the WCP model claim? • What are assumptions, what are hypothesis? • What will be tested empirically next?

  7. Monitoring & Control Strategy & Policy Organization & Processes Information Technology People & Culture See the differences …

  8. A specific order is assumed: StrategyE-technology Processes Control Organization Information A specific order is NOT assumed: Strategy E-technology Processes Control Organization Information

  9. Part 2 • Description of the research • Set-up and organization of the data collection • Validation • Questionnaire and data collection • Data and sampling method • The original questionnaire • Item analysis and variable construction • Description and measurement of the central items • procurement (WCP) maturity • procurement alignment • procurement performance • Explicative conditions • Testing hypothesis • Which of the claims is supported by the data, which parts are not supported? • What does this mean for the model? • What does this mean for the data and/or method?

  10. Validation of the questionnaire and data collection • We applied a self-completion (on-line) questionnaire containing 58 questions with mostly fixed answer categories • It took the 66 respondents, on average, 45 minutes to complete the questionnaire • 48 (26%) questionnaires were completed during 7 group discussion meetings under the guidance of the co-creators of the questionnaire • In general, the respondents confirmed that the questionnaire: • … was valid, i.e. it measured what it claims to measure • … was reliable, i.e. the measurements (questions and answered) were well-understood, clear and convenient to answer • … was relevant, i.e. it fits the knowledge and experience of the respondents

  11. Validation of the data and sampling method • Respondents are spread over different sectors, sizes and other background characteristics • Bias compared to Dutch statistics? (check STATLINE (http://www.cbs.nl/nl-NL/menu/cijfers/statline/toegang/default.htm) • Recruitment of respondents • What sampling method was used? • Is it a reliable or biased method? • Respondents as information source for organizational procurement practices • The right level?

  12. Part 2 • Description of the research • Set-up and organization of the data collection • Validation • Questionnaire and data collection • Data and sampling method • The original questionnaire • Item analysis and variable construction • Description and measurement of the central items • procurement (WCP) maturity • procurement alignment • procurement performance • Explicative conditions • Testing hypothesis • Which of the claims is supported by the data, which parts are not supported? • What does this mean for the model? • What does this mean for the data and/or method?

  13. Procurement (WCP) MaturityDescription and measurement • WCP maturity is questioned by the 15 items as part of the 6 dimensions of the WCP model: • do the answers on the items within each dimension correlate, measure the same latent variable? • Inspect inter-item correlations (sign, p-values and patterns) • Inspect scalability (Chronbach’s alpha) • Inspect latent factors (1-factor analysis) • Consider weighted/unweighted sum to construct new aggregated variables • do the dimensional scores follow the assumed order pattern (Strat./E-tech.  Proc.  Contr. Org. Inf.)? • Inspect the weighted/unweighted sum or mean score for the 6 dimensions • Inspect the individual assumed order pattern for each respondent

  14. Procurement AlignmentDescription and measurement • How to measure ‘balance’, ‘leveling’ or ‘integration’ of the WCP-dimensions? • Select the relevant dimensions • Consider weighted/un-weighted sum of items • Select an alignment formula, e.g: • Largest difference between the dimension-scores? • Standard deviation of the dimensions-scores? • Lowest of the dimensions-scores? • (see slides 3rd EE-lecture, 20/09/2006) • Apply several formula variations, seek for robustness i.e. stability of results, e.g: • Linear: (sum)/(SD), (mean)/(max-min) • Non-linear: (sum*max)/(SD*min), • …

  15. Procurement PerformanceDescription and measurement • Performance is questioned by 6 items: • do these items statistically connect, i.e. measure one same ‘latent factor’? • Inspect inter-item correlations (signs and p-values) • Inspect scalability (Chronbach’s alpha) • Inspect latent factors (1-factor analysis) • Consider weighted/unweighted sum to construct new aggregated variables

  16. Explicative factors/conditionsDescription and measurement • Carefully select the ‘good’ indicators that match with your theory/arguments • Experiment with classifications • Consider typologies, combing factors/conditions • For all selections and constructions: • constantly inspect frequencies • Mind missing values and empty cells

  17. Part 2 • Description of the research • Set-up and organization of the data collection • Validation • Questionnaire and data collection • Data and sampling method • The original questionnaire • Item analysis and variable construction • Description and measurement of the central items • procurement (WCP) maturity • procurement alignment • procurement performance • Explicative conditions • Testing hypothesis • Which of the claims is supported by the data, which parts are not supported? • What does this mean for the model? • What does this mean for the data and/or method?

  18. Testing hypothesis • For example: “Procurement performance is positively related to procurement maturity and alignment” • Inspect ‘correlations’ between the aggregated variables • Check distributions of the aggregated variables • Histogram, mean, standard deviation, skewness • Apply different association techniques • Pearson correlation, Kendall’s tau , Spearman • Check test of significance (on/two-side, p-value) • Check non-linearity of relationships • Inspect scatter plots • Classify variables and inspect crosstabs • Inspect validity/stability of ‘correlations’ • Control for size (partial correlation) • Control for sector (split analysis) • Control for other factors eventually

  19. Part 3 • Describe the specific circumstances of your respondents’ company • General background • Purchasing position and conditions • Describe your respondents’ scores on relevant indicators • WCP maturity scores • Performance scores • Scores from the additional questions • Compare your respondents’ scores with relevant ‘benches’ • Similar companies according to size, sector, purchase position and condition • Does your company fit with the results from the previous overall analysis? • Does your case support the WCP-model and its assumption? • Does your case support the tested hypothesis? • What might be explanations of ‘deviant’ cases?

  20. Part 4 • Conclusions from the survey analysis • Conclusions from the case study • Recommendations for the case study company • Globally: what can be improved, and why? • In conjunction: how to structure/cluster the improvements? • In planning: how to achieve ‘quick wins’, what are ‘longer roads’? • In practice: what needs to be undertaken, what is feasible?

  21. The Multiple Choice Exam of October 13

  22. The Multiple Choice Exam • 1. A typical extended enterprise is an organization that: • A. decreases the barriers between its business units. • B. performs vendor managed inventory. • C. opens up its boundaries to its partners. • D. purchases via its customers. • 2. What has been the role of the Internet with respect to the extended enterprise? • A. An IT-enabler of the extended enterprise. • B. Maturing EDI (Electronic Date Interchange). • C. A pre-condition for the extended enterprise • D. Allowing for mature collaboration in the extended enterprise

  23. The Multiple Choice Exam • 3. Network cooperation is a typical strategy: • A. within competitive value systems. • B. within cooperating value systems • C. between competitive value systems. • D. between cooperative value systems. • 4. Resource dependency is a typical strategy: • A. within competitive value systems. • B. within cooperating value systems • C. between competitive value systems. • D. between cooperative value systems.

  24. The Multiple Choice Exam • 5. RosettaNet is: • A. an industry standard for describing part numbers for sourcing. • B. an industry standard consisting of standardized B2B-messages and inter-organizational processes. • C. an industry standard consisting of standardized B2B-messages only. • D. an industry standard consisting of standardized procurement messages only. • 6. A PIP in RosettaNet stands for: • A. Partner Interconnection Process. • B. Process Invoicing Parts. • C. Process Internet Protocol. • D. Partner Interface Process.

  25. The Multiple Choice Exam • 7. What best describes a remittance advice? • A. A reverse invoice. • B. A packing slip. • C. A purchase order confirmation. • D. A purchase delivery schedule. • 8. What is the major benefit of an ASN (Advanced Shipping Notice)? • A. It enables shorter receiving and warehousing lead-time. • B. It shortens the sales process. • C. It improves the sales pipeline. • D. It allows for fast invoicing.

  26. The Multiple Choice Exam • 9. What best describes Exostar? • A. A consortium of sellers of first-tier aerospace suppliers. • B. A consortium of OEM-competitors in the aerospace industry. • C. A consortium of first-tier suppliers and OEM-competitors in the automotive industry. • D. An excellent agreement between buyers and sellers in the automotive industry. • 10. E-Procurement implementations in the late 1990’s: • A. mainly automated purchasing of direct goods/items/parts. • B. mainly automated purchasing of indirect goods/items/parts. • C. mainly automated strategic sourcing. • D. mainly focused on purchasing of capital goods and assets.

  27. The Multiple Choice Exam • 11. Procurement performance can be defined in terms of: • A. product price, procurement costs and product quality. • B. supplier satisfaction and retention. • C. supplier rating and preference. • D. customer retention and customer growth. • 12. Which company is good example of a company with emphasis on ‘operational excellence’? • A. Oilily clothing. • B. Apple. • C. SAP. • D. Dell.

  28. The Multiple Choice Exam • 13. In many organizations examples of direct materials are: • A. office supplies. • B. company assets. • C. cleaning services. • D. raw materials and components. • 14. What type of goods/parts are preferably ordered through employee-triggered procurement-card purchase ordering? • A. Low transaction value, low purchase dollar value. • B. Low transaction value, high purchase dollar value. • C. High transaction value, low purchase dollar value. • D. High transaction value, high purchase dollar value.

  29. The Multiple Choice Exam • 15. JIT is best characterized by: • A. push production and sales. • B. pull production and sales. • C. make-to-stock production. • D. assemble-to-order production. • 16. The Theory Of Constraints (TOC) for supply chains: • A. provides a strategy for local optimization. • B. provides a strategy for full supply chain optimization. • C. Is a useful strategy for bulk purchasing and selling. • D. Is created by Ilja Heitlager of VivaCadena.

  30. The Multiple Choice Exam • 17. The difference between ‘horizontal’ and ‘vertical’ electronic marketplaces is: • A. horizontal marketplaces focus on selling; vertical marketplaces focus on buying. • B. horizontal marketplaces relate to business functions; vertical marketplaces relate to business sectors. • C. horizontal marketplaces relate to indirect (MRO) goods; vertical marketplaces relate to direct goods. • D. horizontal marketplaces relate to cost savings; vertical marketplaces relate to higher quality. • 18. The productivity paradox reflects: • A. the fact that IS/IT will lead to tangible organizational benefits. • B. the fact that IS/IT does not lead to tangible organizational benefits. • C. the fact that IS/IT doe not lead to intangible benefits. • D. the fact that IS/IT implementation is only effective with the right IS/IT tools.

  31. The Multiple Choice Exam • 19. According to Venkatraman et al. the road to strategic alignment is called the strategy execution perspective if the following path is followed: • A. business strategy, organizational infrastructure, IS infrastructure. • B. IT strategy, business strategy, organizational infrastructure. • C. business strategy, IT strategy, IS infrastructure. • D. IT strategy, IS infrastructure, organizational infrastructure. • 20. According to Venkatraman et al. the road to strategic alignment is called the competitive potential perspective if the following path is followed: • A. business strategy, organizational infrastructure, IS infrastructure. • B. IT strategy, business strategy, organizational infrastructure. • C. business strategy, IT strategy, IS infrastructure. • D. IT strategy, IS infrastructure, organizational infrastructure.

  32. The Multiple Choice Exam • 21. In the frame of a quantitative discussion on the effectiveness of purchasing skills, the following concepts can be best considered as the dependent variable: • A. strategic purchasing, vendor rating. • B. firm performance, purchasing lead-time. • C. supplier lead-time, vendor management inventory. • D. purchase ordering, supplier commitment. • 22. I. Trust is the key concept of the Resource Based View of the Firm proposition II. Heterogeneity of resources is the Transaction Costs Theory proposition. • A. Statement I. is correct, statement II. is not • B. Statement II. is correct, statement I. is not • C. Both statements are correct • D. Both statements are incorrect

  33. The Multiple Choice Exam • 23. From Transaction Costs Theory, what would be the key argument for a University to outsource its IT-department? • A. Never outsource IT because universities do not survive without IT • B. Always outsource IT because this is not a universities’ core competence • C. Only outsource IT if others can do it cheaper then yourself • D. Only outsource IT if other universities do the same • 24. In international purchasing, currency rate fluctuations are very important. How is this factor characterised by Transaction Costs Theory? • A. Specificity • B. Environmental uncertainty • C. Trust • D. Behavioural uncertainty

  34. The Multiple Choice Exam • 25. What is the best description of an intangible benefit of an e-procurement system? • A. Efficient vendor selection • B. Reduction of employees • C. Accuracy of suppliers • D. Reduction of order lead-time • 26. What do Brynjolfsson & Hitt mean by complementary innovation? • A. Innovation is a difficult and complex process • B. Innovation requires strong collaboration with suppliers • C. Innovation requires both technological and organizational actions • D. Innovation is automating all input-, throughput- en output-processes within an organization

  35. The Multiple Choice Exam • 27. According to Brynjolfsson & Hitt, can cost reduction and innovation be combined in IT? • A. Yes, IT should come first then costs reduction follows • B. No, organizations should make a strategic choice between the two • C. Yes, the challenge is to have both in scope • D. No, because IT costs can be estimated while innovation benefits are hard to measure • 28. Tallon, Kraemer, Gurbaxani surveyed US Fortune 1,500 companies in 1998 to test their theory on business-IT alignment. Is this a reliable number of respondents? • A. It depends on the response • B. It depends on the population size • C. It depends on the bias in the response • D. It depends on all the above factors

  36. The Multiple Choice Exam • 29. In their paper, Muffatto & Payaro conclude that the two motorcycle manufacturers would like to become “vertical portals”. What describes best what vertical portals are in this case? • A. Portals to integrate all IT-systems within the company • B. Portals to electronically send invoices and purchasing orders • C. Portals to share e-procurement applications with colleagues • D. Portals to enable on-line sales and auctions • 30. Which of the following explicative factors will strengthen the potential benefits of JIT and e-procurement most? • A. Being (or aiming to be) a service-oriented company • B. Being (or aiming to be) a build-to-order company • C. Being (or aiming to be) a build-to-stock company • D. Being (or aiming to be) an innovative company

  37. Next … • Start design and writing your paper AS OF NOW • SPSS practical course • Friday October 27, 10 AM – 11 AM kick-off in BBL471 and BBL416 • Friday October 27, 11 AM – 1 PM work on SPSS-assignment in BBL408 and BBL412 • Re-exam • Friday October 27, 1 PM – 2:30 PM in Trans 1 Blue Room • Mind this week’s assignment deadline: • Monday October 30, 5 PM

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