The purchasing function is caught in a gap between strategic intentions and tactical realities.
Managing domestic and global suppliers is the most influential strategic lever companies can use to reduce costs and compete more effectively on price.
Purchasing leaders now determine the success of new-product launches.
Truisms? Not necessarily. According to a study of 236 large Canadian and U.S. manufacturing and service companies, purchasing has come a long way toward acting like the strategic function it truly is, but it still has a long way to go.
In a study called “Purchasing's Strategic Role and Team Usage,” researchers looked at what purchasing leaders regard as important strategic work — applying their knowledge about suppliers and technologies to help the company make decisions on outsourcing, new-product development and market planning — and compared it with what their organizations actually do. Their findings indicate a deep gap between good intentions and reality. The research was conducted by P. Fraser Johnson, Robert D. Klassen and Michiel R. Leenders, all of the University of Western Ontario, and Harold E. Fearon of the National Association of Purchasing Management's Center for Advanced Purchasing Studies.