Integrating marketing, operations, and purchasing to create value

For years many researchers and practitioners have been calling for a more boundary-spanning or cross-functional view of the management of businesses. As any student of optimization will note, the combination of several optimized sub-systems will rarely, if every, result in a globally optimized system. It is much the same with a business. Decisions that may appear extremely good within the confines of a single organizational area are often clearly dysfunctional when viewed from other areas of the organization. To effectively compete in today’s marketplace, firms need to effectively link their diverse functional areas. This article provides an example of how the marketing, operations, and purchasing areas can be effectively linked to accomplish the common goal of effectively competing in the value market segment of consumer goods and services.