Strategic Procurement and Competitive Advantage

Since the mid‐1970s there has been a growing, if sporadic, interest in strategic approaches to the procurement process, with an emphasis on the scope for proactivity. However, there has been little consideration of the contribution that may be made to the overall competitive efforts of the organization. This article begins to address this missing link by going back to the fundamental objectives of the purchasing activity and by outlining a framework for the development of a competitive purchasing strategy. The main thrust of such a program centers on the integration of purchasing and procurement operations to satisfy the needs of direct and indirect customers, necessitating constructive management of both inter‐company and intra‐company relationships. The conclusion reached is that purchasing and marketing are not merely interdependent, but that making the “right” procurement decisions is a necessary ingredient in competitive success.