Purchasing organisational structure and competence level effects on a category management project in a publicly owned supply company

Elva Sif Ingólfsdóttir & Jonas Henrik Strunge Dyndegaard

Student thesis: Master thesis


This research provides an analysis and evaluation of the current and prospective status of Copenhagen Energy’s procurement department’s ability to carry out a category management project in terms of their organisational structure and skill levels. Our case-company is Copenhagen Energy, a publicly owned supply company that must, amongst other things, adhere to EU regulations. The company´s procurement function initiated a bottom up improvement initiative (i.e. a category management project) where the problem amongst others, was that they weren´t able to gather transparent information from their systems. An example of this was the inability to tell whether purchases that fell under the scope of regulations had followed EU tender regulations or not, where it was up to the voluntary efforts of the autonomous business units to involve the procurement tendering professionals if they needed help their tendering. Our analyses include the procurement department and its context in terms of: strategic alignment, what skill-sets are required for carrying out the project (i.e. managing purchasing synergies) and for managing the categories when moving forward, how effective the procurement department is in terms of its skill-set and organisational status. We found that the project can be carried out in five steps and requires specific set of skills during each step/phase. When the category teams will be formed, the project lead must select team members whose skillset is aligned with the strategic goals and objectives of the category that is to be managed, as that will enable for effective purchasing behaviour to take place. The procurement department will rise in internal support and internal recognition because of the project, but if the procurement department is not able to demonstrate their abilities to add value for the company, the internal recognition will not sustain. Our research identified that KE’s purchasing organisational structure will affect the synergy benefits resulting from the category management project. Where top management should add value by determining a fit between the approach for managing synergies and KE’s specific business situation. Where our findings indicate that KE does not possess all of the pre-requisites that enable effective synergy management and the current business specific situation has low levels of purchasing maturity and low corporate coherence. A situation that is best approached by sharing all available information and knowledge, and achieves cost savings through economies of information and learning. Furthermore, we found that the main obstacles for carrying out the project will be their information systems, the cultural and managerial differences between the two large supply silos.

EducationsMSc in Supply Chain Management , (Graduate Programme) Final Thesis
Publication date2012
Number of pages119