ABSTRACT
Purchasing has evolved significantly over the last few decades. Suppliers today are providing more of the value to the customer’s product, making supplier relationships and flexibility more important than ever. Today, companies typically spend 60 per cent of their revenue on the purchase of goods and services. A 5 per cent reduction in the price of goods and services procured will therefore translate into a 37.5 per cent increase in profitability for the company. Also, purchasing decisions are in many ways now more complex than they used to be and the days of just selecting the supplier with the lowest quoted price are over. As organizations strive to differentiate themselves from their competitors, they must look to alternative methods to cut cost and improve services.
