Evolving Procurement Organizations: Logistics Implications

An examination was made of the changes taking place in the procurement field. Information was gathered through visits and interviews conducted with purchasing, materials, logistics, production, and upper management personnel in 144 manufacturing or resale lines of business in 117 firms in the US, Canada, Latin America, Asia, Europe, and Africa. Evolving procurement organization models include: 1. centralized procurement, 2. decentralized procurement, 3. centralized coordinator, 4. area planner concept, 5. supply manager concept, 6. commodity teams, and 7. logistics pipeline approach. Current trends indicate that procurement organizations are flattening and adopting a flow-like orientation. Pressures for change come from the need to integrate supply world opportunities, to bring product to market quicker and more effectively, and to speed the entire flow process. Procurement should no longer be simply a processor of paper - its value is as the creator and manager of commercial supply relationships. Procurement does not have to be acquired by logistics for integrative benefits to accrue to the firm.