Strategic Management: Formulation and Implementation

Purchasing Perspective

Purchasing needs long-range as well as short-range perspectives. Particularly, long-range supply relationships must be carefully built.

A step-by-step process is needed in dealing with a supplier in order to develop its ability supply goods with the quality needed at advantageous prices. Moreover, the purchasing function should be value oriented.

Purchasing needs to review its procedures and establish new goals such as buying more value and productivity, rather than just buying a physically described product. The purchasing function must have specific objectives that support and complement other objectives in the company's business plan.

Moreover, it must have cost reduction or containment targets that will have a significant impact on profitability and cash flow.

Purchasing Staff

Product and commodity responsibilities should be clearly defined. However, from time to time, product responsibilities should change to break up relationships between buyers and vendors and instill a new sense of competition to the buying process. People with the right skills and experience are needed to head and staff the purchasing function.

If the company does not have people with the right skills and experience, it must replace the current staff with people who do have them.