Getting Organised for Purchasing and Supply Management in the Information Age

Purchasing structures in large companies nowadays are a lot different from what they were in the Eighties. And they will, beyond doubt, be different from today in the future. Two decades ago concepts like purchasing portfolio management, total cost of ownership, supplier partnership, early supplier involvement and cross functional buying teams were not known. Since then many new strategic and organizational concepts in the field of purchasing and supply (chain) management have been developed. The professional development of the purchasing and supply function in organizations can be analyzed from both an internal and an external point of view. Firstly, the internal role of purchasing changed from a mere operational into a truly strategic role. From just handling orders, negotiating and contracting, purchasing in many organizations now focuses on initial purchasing aimed at developing orderroutines and support systems enabling users to order directly from suppliers, with whom systems contracts have been closed. Secondly, the interface between purchasing and its suppliers changed. From “competitive bidding” and mere tendering, companies have tried to become more differentiated in their supplier strategies. This is reflected by attempts to apply supplier (portfolio) management, to integrate suppliers into product development and to go beyond the first tier of suppliers looking for opportunities to capture further cost benefits (supply chain optimization).