ABSTRACT
Research shows that purchasing and supply management can have a profound impact on a firm’s financial performance (Ellram and Liu, 2002; Singhal and Hendricks, 2002). So,
perhaps not surprisingly, more and more companies have realized that purchasing needs to be managed as a strategic function but what does that mean and how can you tell if purchasing is strategic within a given company? Does ‘strategic’ imply that the purchasing function is not only about ensuring the lowest possible costs of purchased inputs but also about other priorities? Can we measure how ‘strategic’ a purchasing function is and in what ways can a focus on sustainability be considered as part of this question? These are key questions examined in this chapter which begins with a discussion of the meaning and significance of strategic purchasing and how it relates to purchasing strategy. The concept of purchasing maturity is introduced as a way of evaluating how advanced (or strategic) purchasing is within a given company. The role of purchasing in the organization is also explored in the context of the global financial (and later economic) crisis that began in 2008.
