STRATEGIC PURCHASING

“The purchasing function is not strategically important in enabling organizations to gain competitive advantage. Discuss.”



“The purchasing function is not strategically important in enabling organizations to gain competitive advantage. Discuss.”

Introduction

“Purchasing Is Highly Valued and Respected”.

In today's world when a number of things contribute to the success of a firm, purchasing function is also considered one of the major contributing factors towards strategic success of a firm, helping a firm to achieve the competitive edge that in this challenging world. To fulfill this function, many firms have gone through the process of innovation and evolution starting from premeditated services and going through many integrative processes (Benn, et. al. 2007, p. 2649). From a list of many advantages of strategic purchasing a few includes better corporate planning, deduction in a firm's exposure to opportunistic behavior and the most important successful mutual relationships. On the other hand, when a strategic purchasing gives an edge to a firm, it is one of those functions that require a strong and change in management over a period of time (Benn, et. al. 2007, p.2650).

If we look at the earlier studies on strategic purchasing then the emphasis is led mainly on corporate strategy, and the other and the latest have focused on making and implementation of strategic purchasing construct. Many researchers have on focused strategic purchasing as a business practice. If we look at Carr and Pearson studies in 1999 than they have studied the effect of strategic purchasing on the financial position of the performance and in 2002, it focused on the history of strategic purchase and performance mainly (Benn, et. al. 2007, p. 2650). If we look at the most recent studies then we will find Chen et. al. in 2004 focused on the effects of strategic purchasing on supply chain management and financial position of a firm, but the end results tells us that strategic purchasing practices needs more development and innovation.

Understanding Strategic Purchase

If we look at strategic purchasing with a view point to firms advantage then it is a weapon which focuses on the success of a firm by developing mutual and two way relationships, and if we go through the books and researches on strategic purchasing we will find authors and planners focusing on positive and long term supplier relationships. Strategic purchasing is that process which will direct a firm to all those purchasing activities and processes that will take the firm towards opportunities that will enhance the firm capabilities to achieve its long term goals (Carr and Smeltzer 1997, p. 200). Furthermore, this relationship can be enhanced by exchange of ideas and knowledge that both parties possess. We can still finds firms which do not realize the benefits that are extracted from it and they prefer sourcing agreements on minimum negotiable prices. It is not just that you have a perfect conversation with the supplier on the phone, and you have build a two way relationship, it also depends on how the relationships are managed like strong interactions, successful ...