Chapter 3 is all about the academic literature reviews which related to this research, it includes the industrial purchasing, quality of LED component, buying center, re-buy, LED application and package, and all of these are the elements this survey would like to explore.
3.1 Industrial Purchasing
Procurement is very important and will influence the overall organizational success (Ellram, Zsidisin, Siferd & Stanley, 2002; N. Bharadwaj, 2003), and industrial purchasing are always based on the criteria and procurement definition of right time, right material, right quantity, right source and right price (Baily and Farmer, 1985; Paul Steele & Brain Court, 1996), while in terms of supplier’s point of view in industrial practice, it is said quality, price, lead time (delivery) and service determine the success of business. These are the two sides of one coin, as fulfill the former 3 elements of price (right price), quality (right material), lead time (right time), and provide good service to customer, the company would be of great chance to become the selected supplier ( the right source), to deliver the right quantity which buyer decided by either their purchasing strategy or demand. And it is found there were many academic studies also expressing such contention (Dempsey, 1978; Evans, 1981; Matthyssens
& Faes, 1985; Wilson, 1994). As for the importance sequence of these elements would be very different depends on product categories or purchasing strategies, or other concerns (Bennion & Redmond, 1994; Bharadwaj, 2003; Jackson, 1985; Oliver, 1997; Sharma &
Achabal, 1982), and might be changed over time (Wilson, 1994) or along with the new technologies or technical development (Cannon and Perrault, 1999).
However, regarding the purchasing decision criteria, as Bhardwaj (2003) pointed out,
previous studies were more focus on “ to evaluate suppliers differs by product category”, rather than to look into the “ key buying criteria” across the products and service. In his study he use the four groups: product quality, delivery fulfillment, price, post-sales service, to investigate the decision criteria which used in electronic components purchasing, and the result shown the most important criteria was the product quality.
In this research, the goal is to investigate if the major buying criteria are also among these 4 elements: quality, delivery, price, service; and to find out the importance sequence of these factors which influence customer’s decision when purchasing LED component for their application.
3.2 Quality of LED Component
Regarding the Quality, Price, Delivery, Service issues, in the LED industry, the Quality issue need to be highlighted, as the quality determine the price and also the lead time very much, if the yield rate is low to in compliance with customer’s requirement, then the cost will be high, and very likely need to produce another lot in order to get enough quantity to fulfill the order, yet in this way, the lead time will be prolonged.
Due to the quality issue is critical for LED, many studies have been focus on quality improvement, from chip material to process, to LED packaging; from upstream to
downstream, and to application. Such as: Improving the quality of injection molding during the LED Packaging process, to increase the percentage of qualification product (HE, LI & QI, 2007); With proper micro structure to reduce the residual stress in the LED chip, in order to improve the light extraction efficiency (Liuxi Tan, Jia Li, et al., 2008); the suggestion to use Multi Layer Ceramic-Metal Package (MLCMP) for high power LED to have better thermal
resistance (J. K. Park, H.D. Shin, et al., 2006); some studies tried to analyze the factors affecting color distribution of white LED ( Liu, S. Liu, Wang & Luo, 2008) or the LED-based lighting blending ( Boissard & Fontoynont, 2008), et al.. However, there were little survey worked on finding out the quality criteria of LED component.
As a matter of fact, the Quality of LED can not be measured only by “Dominant Factors”, like appearance, color, brightness, forward voltage or functional checking, but also the “Recessive Factors”, like reliability concern (life time expectation, light decay, heat dissipation, thermal shock resistance), not to mention the different color will also alter the importance of quality criteria. Under the circumstance, it is more difficult to be defined. At the side of manufacturer, the common testing is including the photometric, colorimetric, electrical parameters, such as: Luminous Intensity, Total Luminous Flux, chromaticity coordinates, peak wavelength, dominant wavelength, forward voltage, and reverse current (Zhou & Liu, 2009); yet when LED purchaser start to look for the LED components for their product, it is very important that they need to know what kind of LED is good for their usage, and which kind of quality criteria they need to set for the procurement process, and as far as our knowledge, there are not much of the studies from buyer or user’s prospect to determine the quality requirement which might be optimized to their application.
3.3 Buying Center
Most of industrial procurement decision are made by a group of people called
“ buying center” which might consists members from different divisions and with different of functional propose (Bunn, 1993). Some studies had been trying to verify the concept of the buying center, or the relative influential power in the purchasing activities. (Jackson, Keith &
Burdick, 1984), and the researchers were including : Duncan 1965, Meier 1972, Wind 1978,
and Bellizzi 1981, however, the influence are vary due to the buying center structure and purchasing situation are different based on buy class, product type and type of decision (Jackson, Keith & Burdick, 1984).
In this research, the propose is to follow these academic studies, to have an empirical survey to find out if the quality requirement is vary by the different role of organization, in the LED industry. And besides the large-scaled organizational purchasing, there are also small company owners who are in the domain of company’s procurement decision (Ellegaard, 2009); and also distributors and agents, whose expectation of benefits from the relationship with suppliers might not be fulfilled (Ghosh, Joseph, Gardner and Thach, 2004), and their interests might conflict with suppliers’, so in this survey, we would try to also determine if their concern or requirement is different.
3.4 Re-buy
Buy classes were classified as three types: new buy, modified re-buy, and straight re-buy, by Robinson, Farris, and Wind (1967) in the attempt to verify some of the variations in the purchasing process (Jackson, Keith & Burdick, 1984); while, Lucero (2008) evaluated the key problems of industrial firms’ international purchasing and its post-purchase behavior, it was defined as: (1) the repeat order without modification: buyer will place order with the same product with same criteria. (2) Repeat purchase with modification: which is refer to changing supplier or criteria. (3) no re-buy.
No matter it is new buy or post-purchase, little information could be found regarding the issue of re-buy behavior in LED industry. Nevertheless, according to author’s experience in selling LED components and modules in the past 6 years, there are many of “ modified
re-buy “ behavior in terms of quality requirement, the reason might be due to there are too many new applications start to use LED as their light sources, and also many new users and buyers who never use or purchase LED components before, and are not familiar with either the LED characteristic nor the technical terms, and these new users might made some mistake or got wrong impression of LED characteristic on their first purchasing. In light of above reasons, this research intend to verify the requirement of different usage, and try to find out if there is a pattern could be followed by new and experienced LED users and buyers.
3.5 LED Applications
The applications of LED have been developing along with the technology
improvement, in the early state, LED is only good for exit-signs, back-lit and element-lit signs (graphic elements), and with great potential for traffic signs, airport runway markers, decorative purposes, spotlighting (Peralta & Ruda, 1998); up-to-date these applications are already the major popularities, moreover, there are also for the general illumination (home and office lighting, street lamps.) and for large-area flat-panel liquid-crystal displays (Russell, et al., 2008), as well as the special usages for medical applications (Zhang, et al., 2009; Aslan
& Geddes, 2009). Overall, the LED applications are covering almost every kind of usage, from indicator, back- lighting, display, to general lighting, and from indoor to outdoor.
3.6 LED Packages
The package of LED is to bond the chip with PCB and envelop the chip with epoxy compound, there are many types of LED packaging with different manufacturing processes, but in general, the processes including the mounting, wire bonding, cutting, testing and packing (He, Li, and Qi, 2007) .
The common LED package types are including Through hole, Super Flux,
surface-mount device (SMD), plastic leadless chip carrier (PLCC ), and high-power LED, and each type is of its advantage and characteristic, users normally choice the suitable type to design their product, based on the optimized combination of size, illumination, voltage, viewing angle, thermal resistance, and heat dissipation.
Table 3 Common LED Package Types and the Applications LED package
type
Driving current Suitable application
Though Hole 20mA VMS, Traffic signal, Display, Automotive lighting, Consumer item.
Super Flux 50mA Automotive lighting, exit-sign.
SMD 5mA Mobile phone & PDA back-light, Gift item.
TOP LED (PLCC) 20mA Dashboard, Indoor display, game machine back-lighting.
Power TOP LED 150mA General lighting, Semi-indoor display.
High Power LED 350mA
Street lamp, Traffic signal, Automotive lighting-- front lamp; Big size panel back-light.
Source: This study.