A Comparison of North American and European Future Purchasing Trends

IN BRIEF What jobs will exist in a typical firm's purchasing function in the future? The predictions include the following: The absolute number of jobs within purchasing, will decrease, as will the layers of management. Purchasing organizations will adopt flatter forms, with less emphasis on hierarchy and less distinction between positions. "Functional silos" will become obsolete. The classical functions of marketing, manufacturing, engineering, purchasing, finance, and personnel will be less important in defining work. More people will take on project work focused on continuous improvement of one kind or another. Fundamental restructuring and reengineering will become a way of life at most companies. The primary focal points will be a new market-driven emphasis on creating value with customers; greatly increased flexibility; a new business-driven attack on global markets that includes a deployment of information technology; and fundamentally new jobs. Work will become integrated in its orientation, and the payoffs will increasingly be made through connections across organizational and company boundaries. New measurements that focus on strategic directions will be required. Metrics will be developed, similar to the "cost of quality" metric, which incorporate the most important dimensions of the environment. New human resource management approaches will be developed; human resource management will become less of a staff function and more closely integrated with the basic work. Teamwork will be critical to organizational success. This article presents the results of an interactive assessment of future purchasing trends provided by two groups of senior purchasing and materials management executives - one group from the North American Executive Purchasing Roundtable, and the other from the European Executive Purchasing Roundtable. INTRODUCTION As U.S. firms strive to achieve global competitiveness, effective management of the supply chain, as well as sourcing, has assumed great importance. Supply chain management and sourcing (purchasing) have also become academic fields of considerable interest and relevance. It is anticipated that recent and continuing developments in sourcing and supply management will play a critical role in the restructuring and restoration of many industries as they attempt to attain global prominence. The idea of a domestic market and economy has been superseded by the more practical view that all markets and economies are a part of the global economic picture in which all industries must compete. Industry leaders widely acknowledge that achieving global competitiveness requires effective management of the productive and material resources of the organization. The effectiveness with which this is done affects cost, quality, customer satisfaction, and delivery performance of a firm, regardless of its manufacturing or service orientation. These aspects of doing business have become the basis of competition in current markets, leading to their characterization as "order winners." Consequently, in their relentless pursuit to achieve sustainable competitive advantage over domestic and foreign competition, industries are increasingly viewing purchasing not only as an infrastructural or support function, but as a strategic weapon. In many firms, the movement toward an integrated purchasing and supply management strategy has led to pervasive changes in organizational structure, procurement and new product development practices, transportation operations, and in manufacturing facilities themselves. However, the changes and emerging trends in sourcing and supply management, and their impacts on manufacturing operations, are not well documented. For many firms, the emphasis on supply management and preoccupation with purchasing is fairly recent. The importance of the integrating role that purchasing plays in firm-level operations deserves greater attention. The principal motivation for this research project stems from this lack of cohesive information, and the realization that the purchasing function will exert a significant influence over manufacturing operations well into the next century. …