David Farmer 3 Rhyd Yr Helyg, Derwen Fawr, Swansea, West Glamorgan SA2 8DH, UK
The paper challenges the reader to re-examine his or her perceptions; to revisit the fun- damentals of the intellectual framework within which they are working; and to take note of the lessons learnt from the experience. The first part of the discussion is in the form of a retrospective review of business thinking, illustrating the scant attention which was paid to issues concerned with purchasing by academics, consultants and managers in the 60's and 70's. In the second part, an embryonic model is provided for thinking and research in the purchasing field. In addition, a technique is described (with appropriate "thought starters") which should enable readers to "audit" their thinking. ~ ) 1997 Elsevier Science Ltd
Keywords: purchasing myopia, supply chain, pipeline, purchasing research, project review, project "mind mapping", contemplation in research
"What is this life if, full of care, We have no time to stand and stare?" W H Davies - 'Leisure'
During the early part of the century, the poet W H Davies was an astute observer of life in both the UK and the USA. In writing the poem 'Leisure' he left us with an indelible philosophical message. He felt that, during the 1920s, when he wrote the poem, people, as they rushed through their lives, failed to find time to contemplate. One wonders what Davies would make of the world today? What would he think of a society in which technological developments have eliminated the time-absorbing drudgery of earlier years, and yet which involves people in an ever more frenetic style of living?
For example, if he were to observe the business school scene, what would he make of the typical faculty member of the 1990s, hurrying between lectures, semi- nars, tutorials, marking, consultancy, city and city, and country and country? Where, Davies might ask, are the denizens of the 'dreaming towers', those people who, as a result of their calling, philosophized about their field of study in a tranquil, unhurried, scholarly en- vironment of the ancient universities?
No doubt most contemporary academics would re- spond to such a question by pointing to the mounting pressures in their schools, and to the effect of those stringencies upon their pattern of life. They might argue, too, that it is essential for business school
teachers to undertake consultancy assignments in order to 'keep in touch with the real world', and, no doubt, to enhance their (inadequate) salaries. In the process, however, they would have to agree that, because consultancy involves travelling, it adds another element of time pressure to their lives.
Nevertheless, faced with the need to produce papers, articles, case studies and books in order to satisfy promotion criteria, these men and women have to evolve methods that enable research and writing to be undertaken that fit their milieu. It follows that tasks associated with reading and idea formulation, with researching and writing, are undertaken under time pressure, while the work has to be fitted into the person's schedule where and when gaps exist. While today's ever-developing communications technology would appear to be of considerable assistance in alle- viating this problem, somehow new applications for the technology tend to exacerbate the situation.
Clearly, the situation described here is not only applicable to the readers of this journal, nor does it only relate to the academic environment. However, given this author's career-long interest in purchasing and its related fields, it is not unreasonable to use the function as an example in developing the present theme, and to discuss the content in the context of the academic reader, though the arguments are just as relevant as far as the senior practitioner is concerned.
D Farmer
Having arrived at this point, the reader should be aware that m y thinly veiled objective in writing this paper is to persuade him or her to 'stand and stare'. Standing and staring may appear to the workaholic or hard-pressed reader to be an unattainable luxury. Yet, in the business school field - as in many others - the effective use of time for contemplation, for reading and for idea development should be regarded as an invest- ment in the individual's personal portfolio.
A secondary objective is to challenge readers to examine closely their perception of the studies upon which they are embarked. Further, to have them reconsider the basic intellectual framework within which they are operating. In short, for a period, to have them stop and stare, rather than charge on towards the conclusion of the study with which they are currently involved.
Experience In the light of the foregoing, it might be helpful to allude here to another literary quotation. This time, the author is the English author/philosopher Aldous Hux- ley. Huxley wrote that 'Experience is not what happens to you, it is what you make of what happens to you. ' Then, because each of us has but one lifetime, we might add, 'and what we make of what has happened to others' . And, in that context, consideration of business history can provide useful guidelines.
Some years ago the great American historian Alfred D Chandler came to the college where I was working, to conduct a staff seminar. Chandler, of course, wrote that seminal work Strategy and Structure (1962), which provides the reader with a fascinating insight into the development of major US businesses from the initial stages of the American Industrial Revolution. During my early days in academia, Chandler 's book had been a major influence on my thinking. As a result, the historian's visit was anticipated with considerable in- terest.
Shortly before Chandler 's visit, I had concluded my doctoral research study. The work had been concerned with corporate planning and procurement in multina- tional companies. In undertaking that study, I had been faced with both academics and business people, some of whom were patronizing about the role of the pur- chasing function in such processes. However , despite these attitudes, given that Chandler 's work had illus- trated the importance of the role that purchasing played in the development of US businesses - at a strategic, tactical and operational level - I was able to place my conceptual musings into a structure. This structure illustrated the vital implications of input to the management of any manufacturing business. As a consequence, when Professor Chandler took questions at the seminar, I was able to ask him about the importance of purchasing. Chandler was asked, 'Hav- ing in mind the many cases in your book where purchasing is seen to be a key function in the develop-
ment of US businesses, why do you think that many business school academics have a diminished view of the function?' Chandler 's reply was enlightening: 'Be- cause they are not historians.'
Now, the reader should not assume that the implica- tion of this story is that we should all try to become historians. Rather, it is that, as we develop our ideas, we should be cognizant of relevant happenings in the past, and of the work of those who have preceded us. And that might well mean research and writing in fields different from our own. While the reader may feel that he or she is already aware of this view, consideration of what follows may prove to be of benefit.
Indeed, my own experience on coming into the academic world provides a useful illustration in de- veloping the theme. Given the dearth of appropriate purchasing literature at the time (1965), I was obliged to search for inspiration from related fields of study. Among them were marketing, production, corporate and strategic planning, and behavioural studies. While this literature paid scant attention to purchasing mat- ters per se, aspects of the discussion pointed to the fact that the function was of primary status, at least in manufacturing businesses. This conclusion challenged much of the received wisdom of the era. For example, at that time, the only significant influences in the corporate planning process were thought to be finance and marketing. In most cases, purchasing input was assumed to be implicit in what was being written in such plans. Yet simple analysis suggested that all the busi- ness systems involved needed dedicated purchasing input in the planning process. Apart from anything else, it seemed ludicrous to conceive of all the purchas- ers in an economic system submitting, meekly, to the strategies of the marketeers without thinking of being proactive themselves. Furthermore, it seemed obvious that the output strategies in a company were influenced significantly by what was happening at the input end of the business in question. Such insight, the reader will surely agree, was merely commonsense. Yet, in the late 1960s and early 1970s, it was not very common.
At this distance, and with the knowledge that the reader has today, all this may seem to be hardly credible. Yet, as any survey of the literature of that period will show, the formidable collective 'brain' represented by contemporary business school academ- ics, senior managers and leading consultants alike was myopic about the importance of purchasing. Clearly, the moral of the fable of the emperor 's new clothes was not confined to Hans Christian Andersen.
Challenge It seemed to me then, as it does now, that one of the roles of the business school academic is to challenge the received wisdom of the time - where and when he or she feels it to be flawed. Frequently, a starting point for such a challenge is consideration of the fundamentals of the business process. For example, nowhere is there a
Purchasing myopia - revisited
seller without a buyer. Both buyer and seller have the opportunity to influence the behaviour of the other; they may collaborate or compete one with the other; and the impact of their actions upon the system within which they work is iterative. All these things may seem to be so obvious today; however, apparently, they did not appear to be so to the business school/consultancy gurus of the late 1960s and early 1970s. Furthermore, given the increasing sophistication of the work being undertaken in the field in which we study, it is possible that we may forget these basic facts. Please do not underestimate this possibility! As has been illustrated, in the past, formidable collective brains, world-famous names in the field of management literature, largely ignored it.
A present-day example will reinforce this point. Professor Michael Porter's (1985) work has been a significant influence on much contemporary thinking. Yet the reader would be advised to stop and think about one of this author's models. As a result of doing so, he or she may have some interesting questions to ask. For example, why supply chain management? Even the most cursory examination of the processes involved in satisfying today's demanding markets effectively will show that they should embrace a 'pull' rather than a 'push' philosophy. It follows that, if the imagery of a chain is retained, a more apt title would be 'demand chain mangement'. Readers who feel that this is merely arguing a semantic point should re-visit the processes involved in the so-called chain. The foregoing cautionary tale of the academics of the 1960s should be kept in mind throughout the process.
It should be stated here that I readily recognize the benefits that Porter's work has brought to business thinking. Together with the impact of Japanese man- agement practice on the majority of the world's nation- al markets, plus the transparency of today's informa- tion systems, Porter has evoked a broader understand- ing of the importance of the field in which we work than have most others. However, in the context of the arguments that are put forward in this paper, it is important to recognize limitations - in Porter's case, at least with respect to the imagery surrounding his models.
For example, why 'chain'? When a chain is visualized it suggests an object made up of a series of links, most of them forged to another either side of it. In searching for the fundamentals in any business system today, this image may be less than helpful. The author's prefer- ence is to use the term pipeline, which was coined by Forrester (1961). This term appears to best capture the concept that lies at the heart of effective management of industrial and retail systems. Apart from anything else, it implies a continuing flow 'on demand' without the imposition of links, which may be conceived of as interrupting the flow. The point about this aspect of the discussion is that, as psychologists have shown, the creative brain is influenced by images. Thus, in my
view, it is important to use those images that stimulate effective thinking.
In that regard, Forrester's writings are well worth consideration. At the time it was published, his seminal work was criticized by some academics (as I remember it, based upon what were seen to be flaws in the mathematics involved), yet his key philosophical argu- ments have been shown to have been valid by much of the current work in (eg) logistics.
Having mentioned Forrester, it would be as well at this point to urge the reader to adopt a general guideline regarding literature. In my experience, much can be gained by considering the early formative work in any area of literature, for there is danger in focusing only upon subsequent discussion. Criticism and the derived views of other authors can sometimes distort the original arguments, which, in turn, may have a detrimental influence on the understanding of the researcher. This point is made here because observa- tion of the literature in the management field in general shows that much of it is influenced by what might be called 'up-to-datedness'. That is, most journal articles refer to work that has been undertaken during the previous decade or less. As far as the publishers of these journals are concerned, this practice has great merit, for it shows that authors are aware of the current literature and contemporary thinking. In part, this trend is also explained by the fact that many computer- based library listings are continually updated, with older material being left out. Clearly, where that is true (and given the pressure on the time of academic researchers), there is the tendency for older material to be overlooked, for this involves manual search.
Naturally, some may argue that such materials are 'history', that they reflect a different management environment, and that contemporary techniques (and systems and equipment) have changed the business scene to such an extent as to make the earlier material redundant. In response, Chandler might argue that, as a result of not being 'historians', such researchers might fail to understand the fundamentals of a situation. There is also the danger that lies behind the philo- sophical statement that 'more has been written about management than is actually known'. Furthermore, it is well worth noting the similarities as well as the differ- ences between the management environment of former times and that of today. In my view, the business environment described in Chandler's text, in which Durant, Duke et al ran their businesses, has basic similarities with that of today. An example later in this article will illustrate this argument.
The role of purchasing
In the late 1960s, the purchasing function was generally regarded as being a service to production. While I and others had developed alternative arguments, which placed the function in a more proactive position in the organisation, practice suggested that the accepted view
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was correct. At the time, apart from those buyers who operated in commodity markets, it was difficult to find examples where the more positive role was valid in the contemporary situation. It was clear then that, in the majority of companies at least, the roles allocated to purchasing reflected a diminished view of its import- ance by those who managed the concerns. This was reinforced by the bureaucratic organization structures that were common in industrial management at that time. In turn, people were recruited into the function to undertake the tasks that fitted the old perception of the role, and thus the status quo was perpetuated. Mean- while, business schools, academics and consultants reflected the same myth.
In the academic arena, as reference to early texts will show (my own included), the task was described in the light of the, then, current conditions, including the recognized examination syllabi. Authors dutifully re- corded the tasks that were undertaken in business at that time, and adopted a largely descriptive stance. Not until the Journal of Purchasing was founded was there much attempt to take the discussion further, and even then it was unusual for an author to be prescriptive or even conceptual. Overall, the purchasing task was seen to be 'operational', with Ansoff (1970), for example, a major figure at the time, arguing that purchasing was 'administrative' rather than 'strategic'. Yet the reality was that the fundamental importance of purchasing effectiveness to the manufacturing firm was at least as valid then as it is now.
At that time, pessimists among the purchasing com- munity, who had a vision of the need for a different view of the role of the function, may have felt that the task of the few acacdemics in the world to promote a change of attitude was hopeless. However, as time was to show, it proved not to be so, although the principal change agents were not the academics but rather the machinations of the international economic develop- ments of the day. Then even the most myopic Mr Magoos in the business schools, consultancies and manufacturing management were forced to take note of the impact of the purchasing function on the business. First, the oil crisis of 1973, which spawned material shortages on a scale unknown since the Second World War, demonstrated graphically that corporate plans without considered supply market input were severely flawed. Meanwhile, the impact of Japanese business on Western economies was beginning to be felt. Among the several implications of the Japanese approach was the rather quaint idea that suppliers were expected to deliver on time and to the agreed specification. Not- withstanding the fact that every purchasing text of the period included discussion of the 'five rights', at the time there was a tacit acceptance in Western industry that non-conformance was the norm. As a direct result, large numbers of expediters and inwards quality control people were employed by major buying companies. The cost of such myopia was not understood, and it was
to be some time before its impact upon product quality and inventory levels, to mention but two aspects of the problem, was shown to be frighteningly high.
Once again, it seems incredible at this distance that such attitudes prevailed and were being reinforced by business school academics and consultants as they focused upon other areas of business. Yet the fun- damental thinking behind, for example, the Japanese approach was simple commonsense. They expected suppliers to conform because they knew that the impact on a manufacturing system of incoming quality and schedule reliability was significant in terms of business performance. At the time, as the world attempted to understand why the Japanese were being so successful in their assault on world markets, concepts like zero defects, JIT and parts per million quality levels were spawned. Yet the fundamental thinking behind these ideas would have been apparent to early industrialists like Durant and Morris (see Chandler, 1962, and Andrews and Brunner, 1955).
Given these facts, it is reasonable to ask why West- ern business schools and consultancies had not focused their attention upon such primary concepts. Certainly, the 'It's implicit in what we are saying' argument proved to be as facile as those of us who had argued otherwise had always believed. In retrospect, it is my conclusion that the most significant factor in the equa- tion was the established view of the importance - or lack of importance - of the purchasing function when compared with, say, finance and marketing. This estab- lished view was reinforced by what the schools taught and what the consultants advised. And, despite a more enlightened outlook today, it is reasonable to assume that such attitudes have not been eradicated. Business school academics, like the African bull elephant, are jealous of their territories. Furthermore, the majority of the senior people who are teaching in business schools today are pupils of the era that has been described earlier. Established attitudes are not easily changed.
The future and the past
The misconceptions of the 1960s revolved around the traditional role of the buyer and the traditional West- ern organization. The Japanese perceived a different model from that which pertained in the West. Theirs was one in which major buying companies sought to manage their supply markets. While this was the norm in Japan, when their companies came to the USA and Europe they found that they had to educate 'local' companies as far as their expectations were concerned. (Local purchasers had been far less demanding.) This necessitated what we might call proactive purchasing, where the buyer sought to influence the manner in which supplying companies operated, as well as their attitudes to cost and to relationships with their custom- ers. In an era when life cycles were becoming shorter, they also perceived the necessity for closer, more
Purchasing myopia - revisited
100%
% of buyers time
Traditional Role
Admin.
Quality problems
Expediting information
and parts delivery
Market testing via competitive
quotes
Price negotiation
\
\
\ "~\\\\
\ \ \ X\\
\
N e w R o l e
Cost reduction and cost planning activities
Supplier measurement
and improvement
activities supplier
strategies Component
development strategies
Admin.
Negotiation
Additional new
activities
Figure 1 Traditional time used compared with new roles Source: G B Smith, in Gower Handbook of Purchasing Management, 2nd ed
timely collaboration during the product development phase of the cycle. The roles involved in managing these relationships were far removed from those of the 'hard-nosed' buyer, while involvement of the key pur- chasing staff in the total business necessitated the recruitment of people of a different calibre.
In the process, the demarcation lines that separated functions in traditional Western organizations became increasingly blurred. Observation of the current scene shows that cross-functional project teams in manufac- turing/assembly industries have usurped some aspects of traditional functional roles. This has become neces- sary because the traditional linear approach to product development proved to be inadequate in the face of ever-shortening life cycles and greater customer de- mands. While aspects of the traditional purchasing role remain, it is likely that, in future, greater emphasis will be placed on information gathering and dissemination, and on innovative development with suppliers. Mean- while, the functional role will involve developing and establishing supply policy and evolving and managing appropriate supply strategies.
An example of this comes from Geoffrey Smith, Purchase Manager at Nissan Motor Manufacturing (UK). Geoffrey is one of several authors who contri- buted to the Gower Handbook of Purchasing (Smith, 1995) and, in the context of the present discussion, his analysis of the change that has occurred in his role over the last 15 years is extremely telling. One of the illustrations from his chapter demontrates something of his thinking (Figure 1).
As will be seen from the figure, Smith believes that 80% of the tasks delineated under 'traditional role' have been compressed into less than 30% of the 'new role'. Furthermore, as will be seen from the diagram, the principal tasks listed under 'new role' are far more strategic in their nature than those that are shown as 'traditional'. It can be said that Geoffrey Smith and
others like him are now concerned with managing more effectively the interface between their companies and their suppliers.
Leaving aside the specific case described by Smith, it is reasonable to argue that the trend that has resulted in the changes listed by this author will persist. However, as far as industry as a whole is concerned, this will hardly prove to be a sudden metamorphosis. It will take time to change the attitudes of senior managers throughout the business systems. Furthermore, the same may be said about business school academics and consultants.
At this point it is interesting to refer back to Chand- ler's book, Strategy and Structure (Chandler, 1962). Among the many pertinent cases that are discussed in that work is that relating to Durant, the founder of General Motors. Chandler describes Durant's dilem- ma, which forced him to adopt a 'buy' rather than 'make' strategy in the days when horse-drawn carriage makers were making everything for themselves. Durant sought out the most skillful wheelwrights, makers of shafts and body parts, and gave them orders for 'sets'. Contrary to the normal pattern of the day, he became an assembler rather than a manufacturer, which of course had a significant impact upon his cash flow and on his capital employed. In due course, his relationship with suppliers enabled him to buy stands of timber in order that they would be assured of the necessary quality of wood when it was needed. In addition, he helped to reorganize the production lines in some of his suppliers' workshops. In short, he set out to manage his supply market. This technique has recently been 'redis- covered' in the guise of 'supplier development'.
It does not take a great deal of imagination to see the striking similarities between what Durant was doing and the role described by Geoffrey Smith. In fact, Durant can be said to have been involved in all the activities that Smith describes as 'additional new'. The detail and the emphasis may be different, but the philosophy is uncannily similar.
There are, of course, differences between Durant and the modern corporate buyer. The American may be seen as an enterpreneur working in a developing economy. He had little in the way of an organization structure, and was concerned with selling and designing as well as buying. It may be the case that, once the embryo business that was built by such enterpreneurs became 'organized', tasks such as purchasing became to be regarded as administrative. It is interesting to note, however, that when a one-man business develops, the last key task that is delegated by the entrepreneur is the control of major purchases. While entrepreneurs are traditionally thought of as being concerned with the exploitations of sales market opportunities, as Chand- ler shows, true entrepreneurs seek to take advantage of opportunities in their supply markets as well as those in which they sell. It could be argued that the trend described by Smith is one indication of a renaissance of
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-=[ PERSONAL PERCEPTIONS
l RECEIVED
-~. WISDOM - STATUS
QUO
__ ANALYSIS OF
EXPERIENCE
IRE-FORMATION OF
PERCEPTIONS
I Basic Framework
-(e.g.) No buyer without seller
Buyer/sellers influence each other
They may collaborate or compete
The impact of their actions is iterative
Key influences
on such thinking
:-i.e. chains, pipelines, networks ~ ~ 'push' and 'pull' systems
Obviating myopia - an embryonic model for thinking and research in the purchasing field
such philosophy, as companies struggle to compete in today's challenging markets. In the process, it is likely that more people will see purchasing in the light that reflects its potential.
Working with these ideas
Having considered the arguments in the paper, the reader is asked to relate them to the work that he or she is undertaking. What does all this suggest? What ideas in the foregoing discussion impact upon that work? What implications may be drawn from those ideas? Is
there the need to reconsider any aspect of the approach that is currently being taken?
Clearly, other questions might be asked of the reader at this point, and no doubt several more may suggest themselves. Suffice to say that if the reader is diligent in asking such questions and in searching for relevant answers he or she will benefit from the process. In addition, I shall have achieved my objective in getting the reader to 'stand and stare'.
To help to ensure that the advice is taken, the exercises that follow are intended to reinforce the message and encourage further contemplation.
Purchasing myopia - revisited
\ / Cost
\ / noo
Pu has'n Sourc Structures& Seleetmn I I Organisation Place in the
Organisation
Quantity I ~ Market Strategy & Research ] / ~ Quality Planning
~ Planning
Quantities Stock Control ' "Strategy
/ \ / ~ / \ Selecti°n II Objectives I / \
Process Control I Specification Development
/ \ / \
(.
Figure 3 An example of a 'mind-map'
Exercises
Since the fundamental message of this paper is 'stand and stare', it seems reasonable that the author should provide the reader with a means of encouraging such contemplation. This encouragement involves two exer- cises. The first of these is based upon the embryonic model (Figure 2). The idea here is for the reader to consider the research that he or she is undertaking in the light of the model. The questions in this process are self-evident, and should enable the reader to 'audit' his or her work in a reasonably systematic manner.
The second exercise may be undertaken before or after the foregoing. This involves the completion of a 'mind map' along the lines shown in Figure 3.
The reader's own version of this 'map' should relate to the research that they are undertaking (or, in the case of a practitioner, the project with which they are currently involved). Before starting to develop the 'map' it would be helpful to read the list of 'thought starters' included here as the Appendix. The reader will see that within this list some of the items are dupli- cated, or appear under different headings, and that some have structure while others appear to be random. Some of the ideas suggested by the list may not necessarily relate to specific projects.
After reading the lists, and considering the work that
they have been undertaking, readers should be in a position to develop their own 'mind maps'. The map should include relevant items from the Appendix and any others they think of. In developing the map, where it is appropriate, the same item can be included in more than one place. Further, it should be noted that there is no limit to the number of 'stems' that can be included in a map. The process should be started by inserting the title of the reader's research project in the central box and building from there.
Note: While the map might seem to suggest that each stem and its various nodes are separate from the others, they should be seen as being all part of the whole. Each may relate to, influence and be influenced by the other stems and nodes that are included in the map.
After completing the first draft of the map, the reader might write an aide-m~moire using the following headings:
• What ideas have emerged from the exercise that have influenced my thinking?
• In which ways will these ideas affect my research programme/project?
• What additional information that has been suggested by the exercise do I require?
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• Wha t addit ional l i terature sources do I need to consider?
References
Andrews, P W S and Brunner, E (1955) The Life of Lord Nuffield Blackwell, Oxford
Ansoff, H I (1970) Corporate Strategy Pelican, London Chandler, A (1962) Strategy and Structure MIT, Cambridge, MA Forrester, J W (1961) Industrial Dynamics Wiley, New York Porter, M E (1985) Competitive Advantage Free Press, New York Smith, G (1995) 'Purchasing for the motor industry' in Farmer, D and
van Weele, A J Gower Handbook of Purchasing Management 2nd edn, Gower, Aldershot, 535-545
Appendix M i n d - m a p exercise - some thought starters
• Price v cost; developing suppliers; world-class suppliers; lean production; quality management; partnership sourc- ing; shorter life cycles; networking; time to market; buy or make; buy or do; supporting 'local' markets; EC regula- tions; logistics issues; managing change; interdependence and balance; market intelligence; green issues.
• Risk analysis; Porter's five forces; QCDDM (quality, cost, delivery, design and development); management attitude and ability; transfer pricing; cash flow; source selection; supplier base reduction; new buy; modified re-suppliers; product development trends; entrepreneurial drive; di- plomacy and consulting skills; perception of risk; level of risk; managing risk; internal 'marketing'; involvement in planning processing; strategic vision; research ability; sys- tems skills; numeracy; team management; own product knowledge; appropriate skills and knowledge.
• Permanent over-capacities; market saturation; inter- nationalization; greater customer demands; speed of tech- nological change; dominant suppliers; power relation- ships; realizing buying power; policy development; indust- rial sector strategies (buying); quality of market informa- tion; supplier development/investment information; in- formation on buying competitors; futurity of current deci-
sions; system improvement; staff development (new roles); green issues; organizational remodelling; task team membership/leadership. Industry monitoring; production capacity; expected de- mand; investment activity; control of distribution chan- nels; structure of market; mergers and takeovers; strategic focus; raw material supply issues (to the industry); systems development; level of performance against 'world-class' norms; effectiveness of buying performance (in the indus- try); influence of government/EC.
The so-called 'Farmer's laws'
• Purchasing increases in perceived importance in direct relationship with the reduction in the length of the com- pany's product life cycle.
• Purchasing is perceived as being important when the business concerned interfaces significantly with (a) volatile market(s).
• Purchasing is perceived as being important when the business interfaces with demanding customers.
• Purchasing is important whenever the organization con- cerned spends a significant proportion of its income on purchasing goods and services to allow it to do business.
