Why purchasing is changing so fast

By Douglas A. Smock -- Purchasing, 2/22/2001

The meaning of "purchasing" today is dramatically different today than it was 16 years ago. That fact jumps off the page when comparing our profiles of purchasing professionals from 1984, when we first began this research project.

Today's purchasing pro is much more strategic, participates in high-level corporate teams, focuses business with the best-qualified suppliers, and is twice as likely to use computers for a variety of functions than in 1984. Purchasing pros today are highly educated, usually in business or technology, and typically have experience in some other corporate area, such as production, engineering or finance. The most widely bought product category is now electronics.

Purchasing changed because American business morphed from a slumbering giant in the 1960s and 1970s to a nimble, global force in the 21 ^st century. It started with heightened competition from quality-conscious Japanese manufacturers, escalated with the oil shocks of the 1970s, and then snowballed as high-tech factors came in to play. High-tech manufacturers raised the bar on outsourcing and global sourcing. And computers, and electronic data interchange, began the tidal wave that is washing routine transactions out of many purchasing departments. In the 1990s, it became apparent to CEOs that strategic sourcing delivered dramatic benefits to bottom-line performance.

Thousands of companies have reinvented themselves, making purchasing and supply chain management core competencies.

Use key data from our current profile, starting on page 52, to benchmark where your company stands on critical issues, such as:

• Use of computers for online buying. Eighty-six percent of all departments now do this, up from 40% in 1984.

• Roles on management committees. Two out of three purchasing professionals (not just top-level managers) serve on management committees, such as product development, quality and finance.

• Long-term buying. Forty-two percent of all dollars spent are committed to long-term contracts with supplier partners.

• Supplier measurement. Sixty-seven percent of procurement departments have systems in place to evaluate supplier performance. The percentage, of course, is much higher with larger companies.

These trends will accelerate over the next five years. Take your pulse now to make sure you still have one by 2006.