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Lysons & Farrington, Purchasing and Supply Chain Management

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Slide 1.1

 – To er!orm secialised tas"s

 – To achie#e an outut

 – $ith roduction and %arehousing

 – nternal and e'ternal !ocus

 – (no%ledge )ased

 – *emonstra)le s"ills and "no%ledge

 +s a !unction

 +s a rocess

 +s a lin" in the suly chain

 +s a relationshi

 +s a disciline

 +s a ro!ession

What is purchasing?

Perspectives on purchasing

1

2

3

4

5

6

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Lysons & Farrington, Purchasing and Supply Chain Management

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To )uy materials o! the right  ,uality - in the right  ,uantity-

!rom the right  source- deli#ered to the right  lace- at the

right  time at the right  rice.

The rocess underta"en )y the organisational unit %hich- either as a

!unction or a art o! an integrated suly chain- is resonsi)le !or 

rocuring or assisting users to rocure in the most e!!icient manner re,uired suliers at the right time- ,uality- ,uantity and rice and

the management o! suliers- there)y contri)uting to the cometiti#e

ad#antage o! the enterrise and the achie#ement o! its cororate strategy.

The classic de!inition

odern de!inition

What is purchasing?

Definitions

To be contrasted with

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Procurement is the rocess o! ac,uiring goods- %or"s and ser#ices-

co#ering )oth ac,uisition !rom third arties and !rom inhouse ro#iders.The rocess sans the %hole li!e cycle !rom identi!ication o! needs-

through to the end o! the use!ul li!e o! an asset. t in#ol#es otions

araisal and the critical ma"e or )uy decision.

What is purchasing?

Definition of procurement

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Lysons & Farrington, Purchasing and Supply Chain Management

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What is purchasing?

The evolution of purchasing

The Reck and Long model 

Stage haracteristics

1. Product centred

2. Process centred

/. 4elational

3. Per!ormance

  centred

Focused on )est roduct management methods. Emloys

an integrated methodology to manage relationshis-

rocesses and outcomes.

Process and relationally !ocused- e'anded to include

urchasing – sulier relationshis.

o#es )eyond a concern %ith outcomes and )egins to

measure the rocess through %hich the outcome is

deli#ered.

5oncerned %ith the !i#e rights %hich concentrate

e'clusi#ely uon the urchasing o! tangi)le roducts and

outcome dimensions.

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Slide 1.6

What is purchasing?

The evolution of purchasing

Period 1 The early years 71860 !1009

Period 2 :ro%th o! !undamentals 7100–1/9

Period / The %ar years 7130–139

Period 3 The ,uiet years 713;–mid 1<0s9

Period 6 aterials management comes o! age 7mid1<0s–late 1;0s9

Period < The glo)al era 7late 1;0s–19

Period ; ntegrated suly chain management 7)eyond 20009

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What is purchasing?

Purchasing and change

 

"lobalisation impact

#nformation

technolog$

impact

hasing production %

management

philosophies impact

=Transgression o! 

 national )oundaries

= +d#antage o! cost

=Secialised la)our s"ills

=Emerging economies

=Slic"er transactions

=>uality o! management

 data

=Strategic lin" %ith

 suliers

=Paerless en#ironment

=5ometiti#e ad#antage

=?utsourcing

=Suly chain

 management

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What is purchasing?

ncrease in strategic imortance

 +utomated tactical acti#ities

aster contracts

Electronic urchasing

Strategic urchasing cometency centres

Shared suly chain resources

Pro!it contri)ution

5hanged emhasis on indi#idual s"ills

Purchasing in the future

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What is purchasing?

&orld'class purchasing

T>

@T

Total cycle time reduction

Long range lanning

Sulier relationshi engineering

Strategic cost management

Per!ormance accounta)ility

Pro!essional !le'i)ility and de#eloment

Ser#ice e'cellence

5ororate social resonsi)ility

(ust accommodate

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=Power of purchasing to enhance profitability 

Status n!luenced )yA

=Is it transactional, commercial or strategic?

What is purchasing?

The status of purchasing and suppl$ management

Le#erage

Focus

Pro!essionalism=Perception of influencers= Academic activity =epth of !nowledge and s!ill ="uture focus?