Purchasing and Supply Management: Future Directions and Trends

By Carter, Joseph R.; Narasimhan, Ram | International Journal of Purchasing and Materials Management, Fall 1996 | Go to article overview

Purchasing and Supply Management: Future Directions and Trends


Carter, Joseph R., Narasimhan, Ram, International Journal of Purchasing and Materials Management


THE FUTURE OF AMERICAN INDUSTRY

What jobs will exist for the purchasing and supply management (P&SM) function in companies in the future? Predictions include the following scenarios.

1. The absolute number of jobs within purchasing will decrease, as will the layers of management.

2. Purchasing organizations will adopt flatter forms with less emphasis on hierarchy and less distinction between positions.

3. Functional silos will become obsolete. The classical functions of marketing, manufacturing, engineering, purchasing, finance, and personnel will be less important in defining work.

4. More people will take on project work focused on continuous improvement of one kind or another.

5. Fundamental restructuring and reengineering will become a way of life at most companies.

6. The primary focal points will be a new market-driven emphasis on creating value with customers, as well as greatly increased flexibility, a new business-driven attack on global markets (which includes a deployment of information technology), and fundamentally new jobs.

7. Work will become integrated in its orientation. The payoffs will be made increasingly through connections across organizational and company boundaries; included are customer and supplier alliances, with a general focus on improving the value-added chain.

8. New measurements that focus on strategic directions will be required. Metrics will be developed, similar to the cost of quality metric, that incorporate the most important dimensions of the environment. Similar metrics will be developed to support the new uses of information technology.

9. New people-management approaches will be developed. Teamwork will be critical to organizational success. Human resource management will become less of a staff function and more closely integrated with the basic work.

Many of these predictions are already a reality in some leading-edge organizations.

This article presents a summary of the results of The Purchasing Futures Research Project, which was sponsored by the Center for Advanced Purchasing Studies (CAPS). The objectives of the project were to gather and analyze information about the current practices and concerns of North American firms, with a focus on their plans to improve operational competitiveness through effective and efficient purchasing organization, strategies, and practices. The ultimate goal of the project was not to document various purchasing strategies, but to uncover purchasing and corporate trends, and to synthesize these into strategic organizational propositions that provide insight into potential future developments in the purchasing and supply management sphere of activity.

Clearly there is a need to document the changes that are taking place and to understand the implications of these changes so the contribution of purchasing and supply management to corporate competitive advantage can be fully realized. This article documents the important ways in which purchasing's role is changing, and it discusses how this modified role can affect tomorrow's manufacturing environment and the competitiveness of firms.

The objectives of this presentation can be stated simply:

* To convey a sense of importance about purchasing and supply management's future role in firms' performance

* To examine the issues that surround this role

* To offer a framework that managers can use to understand purchasing's future role

* To offer some specific suggestions to management concerning its role

HOW THE RESEARCH AND ANALYSES WERE DONE

The Purchasing Futures Research Project was sponsored by CAPS and conducted by the authors of this article - and it produced a CAPS research report entitled Purchasing and Supply Management: Future Directions and Trends.[1] The original idea came from a list of critical purchasing topics generated by the CAPS Executive Purchasing Roundtable. …

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