92 / 252
80
CHAPTER 4
PROCUREMENT AS A SUPPORT AND STRATEGIC FUNCTION WITHIN COMPANIES
product, and other factors. E-sourcing applications, however, provide tools that
let businesses organise and compare supplier information more effectively [7].
4.6 PROCUREMENT AS A SUPPORT FUNCTION
Procurement plays a vital role in helping to ensure continuity of supply, in
reducing costs, in sourcing from the most appropriate suppliers and so on.
However, procurement cannot accomplish these tasks without a close working
relationship with other functions within a firm, including, for example, engineering,
marketing, maintenance, distribution and manufacturing. In other words, it must
have a close working relationship with the users of the products and services
that procurement obtains. Procurement, ideally, should also work with top
management in a firm to ensure that the procurement strategy is aligned with
and supports organisational strategy and objectives (as outlined earlier in the
chapter). In this section we outline the important role that procurement plays
as a support function under the following headings:
• The team approach to procurement.
• Integrating procurement in the supply chain.
• Procurement’s internal linkages.
• Procurement’s external linkages.
4.6.1 THE TEAM APPROACH TO PROCUREMENT
Driven by pressures to reduce costs and improve the bottom line in today’s cost-
conscious marketplace, purchasing/supply departments have, like most other
functions, sought ways to streamline operations and improve efficiency. One of
the approaches that has enhanced the effectiveness of the purchasing/supply
management function is the use of teams.
Organisations seek to combine the flexibility of decentralised purchasing and
the buying power and information sharing of centralised purchasing through
the use of teams. Various types of purchasing and supply management teams
are used, including cross-functional teams, teams with suppliers, teams with
customers, teams with both suppliers and customers, supplier councils (key
suppliers), purchasing councils, commodity management teams and consortiums
(pool buying with other firms) [8].
Cross-functional sourcing teams often consist of personnel from various
functions brought together to achieve a purchasing or material-related task in
which the team must consider purchasing/sourcing goals or decisions involving
supply base management. Frequently, you find staff from purchasing, finance,
engineering and legal functions forming part of such sourcing teams. Table 4.2
provides examples of groups and teams in supply management.