Supply Management - History

History

Prior to 1900, purchasing was recognized as an independent function by many railroad organizations, but in few other industries.

Prior to World War I, purchasing was regarded as primarily clerical.

During World War I & II – The function increased due to the importance of obtaining raw materials, supplies, and services needed to keep the factories and mines operating.

1950s & 1960s - Purchasing continued to gain stature as the techniques for performing the function became more refined and as the number of trained professionals increased. The emphasis became more managerial.

1970s & 1980s - More emphasis was placed on purchasing strategy as the ability to obtain needed items from suppliers at realistic prices increased.

1983 - In September 1983, Harvard Business Review published a ground-breaking article by Peter Kraljic on purchasing strategy that is widely cited today as the beginning of the transformation of the function from "purchasing," something that is viewed as highly tactical to supply management or procurement, something that is viewed as very strategic to the business

1990s - Supply management (procurement) starts to become more integrated into the overall corporate strategy and a broad-based transformation of the business function is ignited, fueled strongly by the development of supply management software solutions which help automate the source-to-settle process

2000s - The leader of the supply management function within many enterprises is established with a C-Level title - the Chief Procurement Officer (sometimes called the Head of Procurement). Publications, events, and websites that are dedicated solely to the advancement of supply management and Chief Procurement Officers arise. The global recession of 2008-2009 places supply management at the crux of business strategy.

2011 - With the advancement of social networks (facebook.com/supplymanagement), supply management professionals prefer to unite around common interests and values.