Procurement History
a 1980’s Procurement
- Arms length business relationship (our-side vs your side)
- Initial software with purchasing systems that automate POs
- Use of learning-curve theory to drive down pricing year over year
- $1000 govt toilet seats, $75 ashtrays because these required “R&D”
- Personal relationships with vendors – off the books
1990’s Procurement
- Win-Win approach to negotiation
- Emergence of purchasing modules in ERP systems
- Title changes from Buyer and Purchasing Agent to Procurement Manager
- Use of consultants to help with spend analysis
- Increased acknowledgement of Procurement as a part of the broader Supply Chain
2000’s Procurement
- Adding value to negotiations through bigger, more complex buys
- Non-production spend analysis and solutions
- Control over maverick buys through software
- China sourcing (low cost country sourcing and production)
- Coordination across the Supply Chain
- Use of auctions
2010’s Procurement
- Significantly more automation
- Global business environment
- More complexity
- Professional Procurement staff with MBAs
- Procurement is part of core Supply Chain