Purchasing Must Become Supply Management

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Purchasing must become Supply management

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Auteur(s):

Harvard Business Review, september-oktober 1983

Peter Kraljic

Purchasing Must Become

Supply Management

Peter Kraljic

Harvard Business Review

No. 83509

HBR

SEPTEMBER–OCTOBER 1983

Purchasing Must Become Supply Management

Peter Kraljic

The stable way of business life many corporate

purchasing departments enjoy has been increasingly

imperiled. Threats of resource depletion and raw

materials scarcity, political turbulence and government intervention in supply markets, intensified

competition, and accelerating technological change

have ended the days of no surprises. As dozens of

companies have already learned, supply and demand

patterns can be upset virtually overnight.

How can a company guard against disastrous sup-

In many companies, purchasing, perhaps more than any other

business function, is wedded to routine. Ignoring or accepting

countless economic and political disruptions to their supply of

materials, companies continue to negotiate annually with their

established networks of suppliers or sources. But many purchasing managers’ skills and outlooks were formed 20 years ago in an

era of relative stability, and they haven’t changed. Now, however,

no company can allow purchasing to lag behind other departments in acknowledging and adjusting to worldwide environmental and economic changes. Such an attitude is not only obsolete but also costly.

In this article, the author offers pragmatic advice on how top

management can recognize the extent of its own supply weakness

and treat it with a comprehensive strategy to manage supply. He

leads the reader step by step from the roots of the problem to the

implementation of a solution.

Mr. Kraljic is a director in the Düsseldorf office of McKinsey &

Company, Inc., the international consulting firm.

ply interruptions and cope with the changing economics and new...