Purchasing and supply

Purchasing and supply management has recently emerged as an important strategic area of management decision making. Michael Porter in ‘Competitive advantage of notions’ refers to the ‘value chain’ as fundamental to the performance of an organisation. In this value chain, inbound and outbound logistics, and management of the manufacturing operations, are prominent. Deming dealt with ‘supply chain’ concepts as crucial to the successful introduction of TQM. There are those who are saying that logistics has supplanted marketing as the source of competitive advantage and that warehousing is an important part of that logistics mix. With logistics constituting generally at least 20%, and sometimes a much higher proportion of the total cost of a finished product, it is clear that attention must be paid to these areas.