Implementing a Procurement Strategy

Strategic discontinuities in growth and profitability over the past decade suggest that, for the most part, the traditional planning models employed by American industry are less than adequate. Indeed, both corporate planners and purchasing executives are beginning to recognise that corporate strategic planning must balance a historical concern for product/market decisions with an understanding of and an appreciation for those factors that impact on the supply side of corporate performance. Generally speaking, the purchasing profession has contributed little to our understanding of strategic procurement primarily because the practice and principles of planning have been slow to diffuse to the purchasing function. In addition, academicians have offered little guidance. It is clear that formal planning models either ignore totally purchasing‐related factors or tend to treat them as an after‐thought. Part of the difficulty stems from the fact that the planning literature separates strategy formulation from strategy implementation and the focus seems to over‐emphasise strategy formulation. Although it is useful conceptually to distinguish between the two phases of the planning process, in practice they must be integrated if organisational purpose is to be accomplished.