Table of Contents
How Purchasing Fits into the Total Organization
The business world is changing, and the purchasing and supply management professions, unlike any time before, are at a critical juncture. Organizations have been compelled to reengineer, downsize, and otherwise restructure to control costs and remain competitive. In this environment, it's imperative for purchasing and supply management to establish a strategic position. If purchasing can't prove it's adding value to the organization, the function may face outsourcing or elimination.
Speaking the Language of Senior Management
Purchasing and supply management have come a long way in gaining recognition, but nevertheless have an image problem. Frequently the professions are misunderstood, often there is a lack of respect, and in the worst case some business people still believe that purchasing and supply management are comprised of those who can't succeed in other areas.
Adding Value Through Customer-Driven Strategies
Today’s organizations are customer- and cost-driven. This means that an emphasis on right quality and right price, equity growth, and maintaining the competitive edge are key to adding value to the organization. These values apply equally in nonmanufacturing sectors too; when purchasing champions and adds value to its customers, purchasing inevitably
elevates itself and proves its worth across the board.
Developing Continuous-Improvement Activities
Continuous-improvement programs in the traditional sense make process flow more efficient by cutting cycle time and reducing the cost of existing processes. In purchasing and supply management, continuous-improvement activities also mean significant contributions to an organization's success through increased competency and innovation.
Measuring Performance and Value
Where the old purchasing paradigms were price, fragmented sequential tasks, and audit control, the new standards of measure are value-added support to all internal customers, cross-functional teaming for strategic effectiveness, and total cost of ownership management of the supply chain.
A Quick Tactical Guide to Adding Value
Every purchasing and supply management professional knows the drill: everyone wants lower costs, higher quality, and faster service response (shorter leadtimes and processing times) — simultaneously. Yet, even though these demands are quite legitimate and vital to purchasing's value-added role, the prospect of meeting them can be extremely challenging. Purchasing's value-added role includes:
WILLIAM A. BALES, C.P.M.
William Bales, 1990-1991 NAPM president, is currently a senior delegate and president-elect of the International Federation of Purchasing and Materials Management, and an industry advisor to the Center for Advanced Purchasing Studies (CAPS).
WILLIAM M. BUNKER, C.P.M., CPIM
William Bunker is manufacturing manager of the Aerospace Controls Division of the Eaton Corporation, Sarasota, Florida.
ALLEN P. HAGSTRAND, C.P.M.
Allen Hagstrand is director of world sourcing for Cadbury Beverages Inc., Stamford, Connecticut.
STEPHANIE J. COLEMAN, C.P.M.
Stephanie Coleman is the director of information technology acquisition & quality assurance in the Procurement Services organization of Bell South Telecommunications, Atlanta, Georgia.
LAURIE L. STOVER
Laurie Stover, director of commodity management at Lam Research Corporation, Fremont, California, is also a past vice president on the Board of Directors of the NAPM—Silicon Valley, Inc. chapter of NAPM.
JACK BARRY, C.P.M.
Jack Barry is a senior principal with EDS Management Consulting Services, and serves as director of Enterprise Resource Operations Practice.
- Bales, William A., C.P.M., and Fearon, Harold E. Ph.D., C.P.M., Purchasing of Nontraditional Goods and Services. Tempe: CAPS, April 1995.
- Bales, William A., C.P.M., and Fearon, Harold E. Ph.D., C.P.M. CEO’s/President’s Perceptions and Expectations of the Purchasing Function. Tempe: CAPS, 1993.
- Cammish, Robin and Keogh, Mark. "A Strategic Role for Purchasing." The McKinsey Quarterly, Number 21-38, 1991.
- Cavinato, Joseph L. and Freeman, Virginia T. “Fitting Purchasing to the Strategic Firm: Frameworks, Processes and Values.” Journal of Purchasing and Materials Management, Winter 1990, 6-10.
- Dobler, Donald W., Fearon, Harold E., and Killen, Kenneth H., eds. The Purchasing Handbook Fifth Edition, 1993.
- Drucker, Peter F. Post Capitalist Society. Harper Business, New York, 1993.
- Drucker, Peter F. "Tomorrow’s Manager." SUCCESS, October 1993.
- Hall, Gene, Rosenthal, Jim, and Wade, Judy. "How to Make Reengineering Really Work." Harvard Business Review, November-December 1993, 119-131.
- Hammer, Michael and Champy, James. Reengineering the Corporation: A Manifesto for Business Revolution. Harper Business, New York, 1993.
- Hart, Christopher W.L. "The Power of Internal Guarantees." Harvard Business Review, January-February 1995, 64-73.
- Reck, Robert and Long, Brian. "Purchasing: A Competitive Weapon." Journal of Purchasing and Materials Management, Fall 1988, 2-8.
FOR FURTHER READING
- Better Change: Best Practices for Transforming Your Organization. The Price Waterhouse Change Integration Team, Burr Ridge, IL: Irwin Professional Publishing, 1995.
- Cali, James F. TQM for Purchasing Management. McGraw Hill, Inc. 1993.
- Nelson, Robert B. and Wallick, Jennifer. The Presentation Primer: Getting Your Point Across. Burr Ridge, IL: Irwin Professional Publishing, 1994.
- Leibfried, Kathleen H.J. and McNair, C.J. Benchmarking: A Tool for Continuous Improvement. Oliver Wight 1994.
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