Purchasing, Risk and Logistics: A Neglected Combination?

Abstract

In industry today the majority of managers appear to be aware of the importance of the purchasing function in manufacturing organisations and of the need to secure supplies of materials at the best available prices. What is not well recognised, however, especially by the senior non‐purchasing managers in the majority of manufacturing organisations, is the need to consider purchasing as a risk‐taking function and the need for supply management to be involved in strategic planning processes. Furthermore, there is a growing body of evidence to suggest an alarming ignorance of the need for senior executives in procurement operations to make strategic evaluations of their supply markets, to evaluate the risks involved in particular supply channels and to be able to relate these to their company's marketing objectives. The strategic planning requirements of purchasing are not well understood at a fundamental level and this may, in part, explain the view held widely in manufacturing organisations that purchasing is essentially an administrative function, concerned mainly with administrative procedures and tactical decisions, and need not be involved in the forward corporate strategy and planning processes of the organisation.

Citation

Wright, G. (1980), "Purchasing, Risk and Logistics: A Neglected Combination?", International Journal of Operations & Production Management, Vol. 1 No. 1, pp. 47-58. https://doi.org/10.1108/eb054659