In February, 2008, I penned my third annual CPO-focused report which is when I introduced the idea of “CPO Rising” (If you are interested, I found a copy of the report online with no registration required. You can get the report by clicking here –> CPO Rising: The CPO’s Agenda for 2008). Besides laying out a vision that later became this site and a broader vision for procurement leadership in the report, I also went through the archives of business writing on procurement and layered a series of significant quotes from those materials. Today, I will share some of the quotes which cover topics that are still relevant to the profession. In 2008, I found the insights (particularly their timing) to be very interesting. I still do. I believe you will too.
On supply management:
“The intelligence and fidelity exercised in the purchase, care, and use of supplies, influences directly the cost of construction and operations, and affect, therefore, the reputations of officers and the profits of owners…The subject needs elucidation on many accounts.” ~ Marshall M. Kirkman, The Handling of Railway Supplies: Their Purchase and Disposition; 1887.
On business planning:
“The purchasing agent should be in the ‘crow’s nest’ or ‘lookout’ of the business craft equally, if not more often, than the sales director.” ~ Helen Hysell, The Science of Purchasing; 1922.
On spend analysis:
“Purchase ‘Engineers’ should aid buyers in investigating potential areas of cost reduction…the scientific, systematic collection of data, by specialists, [should serve] as a basis for purchasing decisions.” ~ Norman F. Harriman, Principles of Scientific Purchasing; 1928.
On process:
“When it is considered, that buying requires not only keen, shrewd, business judgment, but also a vast amount of technical knowledge compactly arranged, it is evident that the systemization of the department of purchasing, too, is worthy of careful research, study, and treatment.” ~ H.T. Kett, et. al., Book on Buying; 1905.
On staffing:
“If there is one place more than another in a large concern that requires an honest, shrewd, experienced, practical man to make money in, it is the buyer’s.” ~ Machine Shop Notes, The Engineering Magazine; Dec. 1892.
On transformation:
“Procurement executives were clear: automation and strategies are important, but transformation and execution will rely on having the right people and organizational alignment.” ~ Tim Minahan, The CPO’s Agenda: Five Strategies for Procurement Transformation; March 2005
On Total Cost of Ownership (TCO):
“The science of buying is recognized more clearly in its proper perspective today than ever before. Increasing consideration is being given not only to the first cost but also to the longer range factors of fitness, inter-changeability, renewals, replacements, general maintenance, wearing qualities, and cost per unit of utility. The tendency to buy at so much per unit of quality or utility, instead of per unit of quantity, is one that will increase. The idea is fundamentally and economically sound.” ~ Norman F. Harriman, Principles of Scientific Purchasing; 1928.
On supply risk:
“In today’s competitive and unpredictable global market, the pervasive inadequacies of enterprise supply risk management capabilities are cause for outright alarm.” ~ Supply Risk Management Benchmark; September 2005.
On organizational structure:
“It has seemed wise to form a new basis for buying, consisting in the establishment of a central purchasing department, which takes direct charge of the buying of the larger and repetitional [sic] items, supervising at the same time the local purchasing of smaller items at the various plants.” ~ William D. Ennis, “The Relation of Purchasing to Production,” The Engineering Magazine; 1905
On recessions:
“With the global economy slipping into a recession, cost cutting has become job one for most businesses. After reducing headcount and streamlining internal processes, companies are now looking to trim the fat and inefficiencies from their extended network of supplier partners. Procurement and supply chain management are at the head of this charge.” ~ Best Practices in E-Procurement; December 2001
And, in case you don’t download the report, here is how it began:
Enterprise Centurions
Though it was not until the second half of the 20th Century that the procurement function began to shed its largely clerical identity, the view that procurement (or purchasing) can deliver strategic value to an enterprise dates back decades before World War I. Certain events through the course of the 20th Century have, at times, placed procurement at the hub of business process and at the core of business profits. From the birth of the assembly line to Six Sigma and lean manufacturing, the critical importance of having the right materials at the right place at the right time has supported production efficiencies and spurred product quality and sourcing from the right supplier at the right price has driven cost savings and product innovation through periods of high growth, high inflation, and rapid change. In the new (21st) century, procurement’s strategic gains have accelerated, enabled by advancements in automation and refinements in process; the new century also brought new challenges. And like a Roman Centurion, the Chief Procurement Officer (CPO) leads his / her team from the front lines, exposed on the flanks by an increasingly volatile and increasingly global marketplace and marked by an increasing prominence that demands greater performance. The CPO is rising. ~ Andrew Bartolini, CPO Rising: The CPO’s Agenda for 2008, February, 2008.
So, that was the past – if you are interested in the present and future of procurement, you should not miss this webinar.
