Unite and conquer – End-to-end value creation through intra-organizational purchasing-sales integration

Abstract

An effective value chain depends on the seamless flow of goods, services, and information between chain partners. A rich literature describes how a firm's purchasing function may develop effective co-creation relationships with upstream suppliers, while its sales function co-creates value with downstream customers. However, effective end-to-end (E2E) value creation is often hampered by the missing relationship between a firm's purchasing and sales functions. Especially in industrial manufacturing firms, purchasing and sales often operate independently from each other resulting in lost opportunities and inefficient supply chains. Although buying and selling are often treated as separate disciplines, academics increasingly emphasize the need for effective purchasing-sales integration (PSI).

Inspired by two Special Issues of Industrial Marketing Management on the purchasing-sales interface, we contribute to this emerging literature with an integrated academic-practitioner perspective. Based on extensive practical and academic experience, we develop a conceptual framework that integrates the scope and intensity of PSI, illustrate it with numerous practical examples, and formulate guidelines for management to strengthen their organizations' PSI. In addition, we present several theoretical propositions and suggestions for both future research and for business schools to connect purchasing and sales in terms of their curriculum, degrees, course materials, research projects, and collaboration with practitioners.