ABSTRACT

The advent of just-in-time purchasing techniques in the 1980s, with its emphasis on inventory control and supplier quality, quantity, timing, and dependability, put more competitive pressure on suppliers and made purchasing an important part of an organization's overall competitive strategy. The paper-based supply chain organization started giving way to e-based approaches with an increase in the speed at which purchasing transactions could be completed, which was further accelerated by the growth of e-commerce. In historical terms, purchasing-referred to more commonly nowadays in a broader sense as procurement or sourcing-was thought of as the act of finding, acquiring, or buying goods, services or equipment from external source. In the 2000s, purchasing continued to shift its primary focus on cost to broader terms, hence the commonly used more strategic terms of procurement and sourcing. Companies should consider total cost of ownership when purchasing assets and making investments in capital projects, using costs that are usually found separately on a company's financial statements.