eThesis - School of Business electronic theses

This research focuses on finding opportunities to increase international purchases at Lemminkäinen Oyj, one of the largest construction companies in Finland. The focal company has a need to develop in this field to reach cost savings and in order to stay competitive as there is little experience within the company in international purchases and competition is moving fast.

The research was conducted as a single case study by conducting nine interviews with managers within Lemminkäinen Oyj in the summer of 2012. The theoretical foundation of the study is based on theories in supply chain management in construction and on strategic sourcing. Systematic combining was chosen as the research method, where the theoretical framework of the study is developed through matching the empirical evidence of the study to the existing literature.

There is little existing research on developing international purchases in construction. From a theoretical perspective this study aimed to fulfill this gap. The main theoretical contribution of the research is that in order to develop international purchases in construction, a careful understanding of the industry is needed and that a holistic development of the purchasing unit precedes the move towards strategic sourcing.

The key managerial contribution was that in order for Lemminkäinen Oyj to develop in international purchasing, a long term orientation is needed with clear top management support. The challenges in cooperation between the purchasing unit and the businesses call for a cultural change within the company and careful communication and change management is needed to progress. The emergence of building information modeling can help Lemminkäinen in getting the scale for international purchases in the long term. In the short term, in order to get traction in the aim of moving towards strategic sourcing, promising categories for international purchases need to be identified with the help of category management, resources in the purchasing organization need to be strengthened, careful risk taking with the help of supplier selection and risk management models need to be used to enable the organization to gain experience and learn on the way. Involvement in international business networks also needs to be developed and the establishment of international purchasing offices would accelerate the development further.