1 Evolution of Purchasing IDIS 424 Spring 2004

Charles Babbage’s book mentions a “materials man” Use of Selling Agents Railroads created a “Supplying Depart.” –Need for technical expertise –Centralization –Contributions to Profitabiity

Development of purchasing procedures and forms Development of material specifications Articles on purchasing appeared in trade journals National Association of Purchasing Agents established in 1934

Acquisition of needed and scarce materials Purchasing courses offered at universities

Marketing overshadowed purchasing Purchasing regarded as a negative function by most firms GE created a Purchasing Analysis Department in 1960 to analyze material prices

Concept of Material Management developed (total systems approach) Techniques of multiple sourcing and competitive bidding introduced

New technologies and increased global competition created the need for new approaches to purchasing A “world view” of purchasing developed Use of Purchasing Professionals Purchasing Managers became part of top management teams Development of cross-functional purchasing teams

and Beyond Emphasis on supplier development and supplier improvement Focus on cooperative rather than on adversarial approaches with suppliers Greater integration with other functions of the firm Greater emphasis on the big picture (Strategic Purchasing)