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What is purchasing?
Perspectives on purchasing
1
As a function
As a process
To achieve an output
As a relationship
As a discipline
Knowledge based
As a profession
Slide 1.2
What is purchasing?
Definitions
The classic definition
To buy materials of the right quality , in the right quantity,
from the right source, delivered to the right place, at the
right time at the right price.
To be contrasted with
Modern definition
The process undertaken by the organisational unit which, either as a
function or a part of an integrated supply chain, is responsible for
procuring or assisting users to procure in the most efficient manner
required suppliers at the right time, quality, quantity and price and
the management of suppliers, thereby contributing to the competitive
advantage of the enterprise and the achievement of its corporate strategy.
Lysons & Farrington, Purchasing and Supply Chain Management
PowerPoints on the Web, 8th edition Pearson Education Limited 2012
Slide 1.3
What is purchasing?
Definition of procurement
Slide 1.4
What is purchasing?
The evolution of purchasing
The Reck and Long model
Stage
1. Product centred
2. Process centred
Characteristics
Concerned with the five rights which concentrate
exclusively upon the purchasing of tangible products and
outcome dimensions.
Moves beyond a concern with outcomes and begins to
measure the process through which the outcome is
delivered.
3. Relational
4. Performance
centred
Slide 1.5
What is purchasing?
The evolution of purchasing
Period 1
Period 2
Period 3
Period 4
Period 5
Period 6
Period 7
Slide 1.6
What is purchasing?
Purchasing and change
Information
technology
impact
Globalisation impact
Transgression
of
national boundaries
Advantage
of cost
Slicker
transactions
Competitive
Quality
of management
Outsourcing
advantage
data
Supply
Specialised
labour skills
Strategic
link with
chain
management
suppliers
Emerging
economies
Paperless
environment
Slide 1.7
What is purchasing?
Purchasing in the future
Increase in strategic importance
Automated tactical activities
Master contracts
Electronic purchasing
Strategic purchasing competency centres
Shared supply chain resources
Profit contribution
Changed emphasis on individual skills
Lysons & Farrington, Purchasing and Supply Chain Management
PowerPoints on the Web, 8th edition Pearson Education Limited 2012
Slide 1.8
What is purchasing?
World-class purchasing
Must accommodate
TQM
JIT
Total cycle time reduction
Long range planning
Slide 1.9
What is purchasing?
The status of purchasing and supply management
Status Influenced by:
Leverage
Focus
Professionalism
Power
Is
Perception
of influencers
Academic activity
Depth of knowledge and skill
Future focus?
Lysons & Farrington, Purchasing and Supply Chain Management
PowerPoints on the Web, 8th edition Pearson Education Limited 2012