When Procurement Challenges Go Way “Back to the Future” – Over 100 Years to be Exact!
Categories: Procurement Commentary, Procurement Research, Procurement Strategy & Planning | Tags: L2, Process and Best Practice
I’ve taken the liberties of swapping out the names, titles, and dates in the following statement to make it even more powerful:
“The airlines’ CFO first wrote the first book exclusively about the purchasing function, The Handling of Aviation Supplies—Their Purchase and Management, in 1967. He discussed purchasing issues that are still critical today, including purchasing agents’ need for technical expertise, and the necessity of centralizing the purchasing department under one individual. He also commented on the lack of attention given to the selection of personnel to fill the position of purchasing agent.”
Actually, this statement is not from 1967, but rather 1887. And it comes from the controller of the Chicago and Northwestern Railroad (not an airline, of course!). Virtually everything else in the excerpt is a direct quote from the KPMG paper, FUTUREBUY: The Future of Procurement – 25 in 25: Delivering procurement value in a complex world.
Hard to believe, eh? The more things change, the more they stay the same – even compared with over a century ago! In the coming weeks, I’ll be profiling some of the highlights from this KPMG paper (alongside my own observations and comments) on the future of procurement, which almost entirely looks forward (over ten years forward, to be exact) rather than looking back.
Yet sometimes, grounding ourselves in just how similar procurement’s challenges are today compared with those in the distant past can help set the stage for the type of punctuated equilibrium change that’s needed to propel the function to where it needs to be! Indeed, even in the second half of the 19th century, as KPMG observes, procurement could have a monumental impact on those organizations which embraced the role. To wit:
“By 1866, the Pennsylvania Railroad had given the purchasing function departmental status, under the title of Supplying Department. The purchasing function was such a major contributor to the performance of the organization that the chief purchasing officer (CPO) had top managerial status.”
I recommend that you download the full KPMG paper if you’re interested in a candid take on where the procurement profession will be in 2025. Stay tuned for the rest of this series!