The value-adding potential of procurement is now widely recognised. It was not always so. In previous times, procurement occupied a peripheral position within most organisations. It was viewed in operational or tactical terms, but rarely as a strategic, value-adding activity.
So what changed?
Trends in global business, industry, organisational management and business education have all contributed to a new perspective. Notable among the changes are the following:
• Borderless commerce has placed pressures on firms’ cost bases. This, in turn, has caused firms to search for efficiencies throughout the supply chain.
• Realisation that suppliers can represent a source of competitive advantage, through either lower prices, higher quality, or more innovative products and services.
• Much greater emphasis on transparency and corporate compliance. This has percolated down to transparency and compliance in purchasing.
• Purchasing and supply chain management are now included alongside finance, management and marketing as part of the third-level business curriculum. Today’s graduates are more aware of the link between purchasing and organisational competitiveness than ever before.
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