Integrating Procurement into Supply Chain Management
I cannot resist commenting on the Basic Training article titled “Everybody get on the bus” written by Art van Bodegraven and Ken Ackerman in DC Velocity’s print edition for February 2013. As a “purchasing guy” in my early career, I watched along with Art and Ken as organizations moved first into “Materials Management” and then supply chain to take advantage of the information that was becoming available on a real time basis as computer technology and ERP systems developed.
From my perspective operations management was just a convenient label used by companies to describe what we know today as Supply Chain Management. An important step in bringing purchasing into the mix started in many organizations when they combined buying jobs with planning jobs and the term buyer/planner came into fashion. Some companies like the term planner/buyer, I hope that we can avoid debating which is the better choice. It was interesting to watch how individuals in that role took advantage of the ability to make more holistic decisions including both cost and inventory impact.
I see very few companies, both large and small, with an Operations management function instead of a supply chain approach. I agree with Art and Ken that the procurement community was probably more protective of its turf than made sense for many years. I see sourcing as one of many important functions within supply chain, and it should be included in that organization.
In the bad old days, companies wasted a lot of time and energy protecting organizational silos and treating their suppliers as adversaries, not partners in an end-to-end process. Every time that I discuss this history with my students at the Illinois Institute of Technology, it reminds me of the true impact supply chain management has had on the global economy.
It will be interesting to see how some of the associations that include many supply chain practitioners among their membership will continue to re-label themselves. The Council of Logistics Management is now the Council of Supply Chain Management Professionals. The American Production and Inventory Control Society – APICS – is now the Association for Operations Management. The National Association of Purchasing Management is now the Institute for Supply Management. Whatever their names, all three play an important role in fostering the growth and knowledge of supply chain people.