1.4 The Evolution of Purchasing

Purchasing wasn't always a strategic value-added function (see Figure 1-3). Before World War II, companies managed purchasing as a clerical function and purchasers "placed and chased" orders, meaning buyers filled out purchase orders and then expedited late deliveries. If someone wanted to move up in the organization, purchasing wasn't the right career.

Purchasing Becomes Strategic

Over time, external events elevated sourcing to its current strategic position. During World War II, for instance, materials shortages required companies pay more attention to purchasing. Later, in the 1980s, world-class Japanese automotive and electronics companies quickly captured global market share, highlighting the power of lean—aka, just-in-time—practices. Competitive pressures increased in the 1990s and companies turned to outsourcing and offshoring. Purchasing had become strategic.

Today, consultants like to talk about value-added processes spanning functions and firms. They claim organizational boundaries are blurred. What does this mean to a purchasing professional? Your company depends on suppliers for more than goods and services. You rely on suppliers for product and process innovations. You therefore share resources like engineering expertise across organizational boundaries. As a purchasing professional, you are responsible for acquiring, developing, and coordinating the capacity and capabilities of a world-class (and probably worldwide) supply team. What does this mean? You need a complete set of analytical and inter-personal skills to succeed. Starting your career in purchasing can now launch you on an exciting path leading to the C-suite.

The Power of Storytelling

Why is this brief history lesson important? At some point in your career, you will work with someone who still sees purchasing as a non-strategic player. When this happens, you need to be an influential storyteller. That is, you will need to demonstrate the value purchasing brings to the table. Of course, learning to show how you contribute to your firm's competitive success is a great skill to cultivate regardless of your chosen career path.