SUPPLY CHAIN MANAGEMENT

How Purchasing has evolved

Prior to 1900 , purchasing was considered as an independent and clerical function . Slowly after a decade it was considered as an important organizational function because of the enormity of raw materials and supplies needed to keep factories running . In mid of 20th century , the importance of purchasing function grew and more stress was laid on its management . The techniques and professionals involved in purchasing got more refined . After 1970s , theories regarding purchasing emerged , and purchasing was transformed from tactical to strategic function . It was about getting from

the suppliers the needed customized items at competitive prices . The purchasing strategy was aligned with corporate strategy . Currently , the information technology and supply network integration is transforming the purchasing (transaction based ) into supply management (process oriented ) to reflect the strategic importance of this function

Why Purchasing has changed

The function of purchasing has changed greatly because of several reasons . The first reason is market characteristics . The demand for organizational products is derived and there are only few large purchasers . The second reason is product characteristics . The industrial products are sometimes very technical and are also intermediate products . Therefore the semi finished product 's specification should match the organizational processes . There is also emphasis on technical assistance , delivery time , financing assistance and post sale service The third reason is buying process characteristics . Organizational buyers have specified policies and procedures and usually evaluate seller and products on these criteria . The people involved in the buying process are usually professional . Organizations usually...