The New Role for Purchasing
The greatly accelerated rate of change in social, political, and economic variables as well as in technology forces companies to monitor their environments constantly. A strategic use of purchasing links a company to its environment, especially as the environment affects future procurement requirements. Sensible decisions about such requirements call for buyers and suppliers to share information. Strategic purchasing objectives grow out of a company’s long-range planning process; at the same time, of course, purchasing needs and realities—critical information, say, on new products, new technology, or the likely availability of materials—may affect the choice of corporate objectives.
At a macro level, a strategic use of purchasing requires a purchasing manager to monitor the company’s environment, forecast changes in that environment, share relevant information with suppliers and colleagues in other functions, and identify the company’s competitive advantages and disadvantages relative to its suppliers. At a micro level, strategic purchasing involves the identification of critical materials, the evaluation of possible supply disruptions for each of them, and the development of contingency plans for all identifiable supply problems.
Thus the most vulnerable aspect of the product development system in many companies is their failure to use the full creative capabilities of potential suppliers. The biggest mistake of purchasing executives in these organizations is their failure to get involved in the requirements development process. This pattern of avoidance is a holdover from the days when purchasing was a reactive, clerical function, limited to issuing and maintaining custody of documents that confirmed other departments’ decisions.
Now and in the future, however, the viability and integrity of product design, development, and production can be ensured only if purchasing steps in early in the requirements process—that is, if it has a significant role to play from the very beginning of the design process. In most organizations, purchasing is accustomed to working with manufacturing, but now it must work in tandem with R&D and engineering as well. At the heart of the new product development process, there must be room for what purchasing has to say—and do.