According to the case study, €474 million was spent on materials and services in 2003 of which over €300 was spent annually for the procurement purposes. Therefore, purchasing has had a significant impact on the company's bottom line and was of vital importance to Dräger. Thus, there is an urgent need to establish a new procurement strategy for corporate purchasing at Dräger Medical that would provide the company with both cost-effective and quality materials and health care equipment in the absence of competitive pricing strategy. The question remains: how to make purchasing more effective and how to free capacity so that Dräger Medical could improve its focus on core competencies? .
To achieve this aim, it is suggested to adopt just-in-time (JIT) strategy for purchasing at Dräger Medical. JIT is a purchasing principle that involves four main characteristics (González-Benito, 2002). The first one is the operational practices (eg. frequent delivery, reduced inventory, exact delivery time and electronic data interchange (EDI). The second characteristic is the relational practices (eg. frequent communication, single source, long-term contracts, lasting relationships, foster cooperation, benefit and risk sharing, mutual assistance, cost information exchange, and cost-based price calculation). The third characteristic is the involvement practices (eg. supplier involvement in design and development, engineering visits, supplier development programmes). Lastly, the fourth characteristic is the quality practices (eg. supplier selection based on quality and reliability, performance control, and quality certification). .
The aim of using the JIT strategy should be to improve purchasing performance. According to Kumar, Ozdamar and Ng (2005) purchasing performance is referred to as the extent to which the purchasing department is capable of meeting its predetermined objectives by utilising a minimum resources of the organisation.
