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Evolution of Purchasing

Evolution of Purchasing. IDIS 424 Spring 2004. 1830-1900. Charles Babbage’s book mentions a “materials man” Use of Selling Agents Railroads created a “Supplying Depart.” Need for technical expertise Centralization Contributions to Profitabiity. 1900-1939.

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Evolution of Purchasing

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  1. Evolution of Purchasing IDIS 424 Spring 2004

  2. 1830-1900 • Charles Babbage’s book mentions a “materials man” • Use of Selling Agents • Railroads created a “Supplying Depart.” • Need for technical expertise • Centralization • Contributions to Profitabiity

  3. 1900-1939 • Development of purchasing procedures and forms • Development of material specifications • Articles on purchasing appeared in trade journals • National Association of Purchasing Agents established in 1934

  4. 1940-1946 • Acquisition of needed and scarce materials • Purchasing courses offered at universities

  5. 1947-1965 • Marketing overshadowed purchasing • Purchasing regarded as a negative function by most firms • GE created a Purchasing Analysis Department in 1960 to analyze material prices

  6. 1966-1970 • Concept of Material Management developed (total systems approach) • Techniques of multiple sourcing and competitive bidding introduced

  7. 1971-1999 • New technologies and increased global competition created the need for new approaches to purchasing • A “world view” of purchasing developed • Use of Purchasing Professionals • Purchasing Managers became part of top management teams • Development of cross-functional purchasing teams

  8. 2000 and Beyond • Emphasis on supplier development and supplier improvement • Focus on cooperative rather than on adversarial approaches with suppliers • Greater integration with other functions of the firm • Greater emphasis on the big picture (Strategic Purchasing)

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