Strategic Management of External Resources (PDF)

Until a few years ago, purchasing was seen as a necessary evil within companies. Even today, for many firms, purchasing is still considered as a support function. At the same time the strategic dimension of this central function is more and more understood. Many CEO become aware of the potential of this function in improving their companies' performances, not only through cost reductions but also through value creation. More and more innovation is important and the only way to innovate is to do this with suppliers. Because of the externalization process, for many companies, purchasing represents 60 % of the turnover (80 % in the automotive or in the aviation industries). In such conditions, understanding the growing dependence towards suppliers is easy. The ideas that buyers are powerful and that they can easily find suppliers all around the world are strong but wrong. Working with the best suppliers, suppliers with whom you can build competitive advantages based on the technical, social or environmental quality of your products, is not that easy. You have to deserve working with them and to give them the ambition to work with you. In a word, you have to become the preferred client of the best suppliers. That is why, more and more, purchasing is seen as a function which should better been called "e;Strategic Management of External Resources"e;. This is the title of this ebook in which several contributors will present the evolutions of the purchasing function and the way more collaborative relationships can be built with suppliers in order to innovate and to create value. The ebook will be relevant for buyers, CPO (Chief Purchasing Officers), CEO and for all their colleagues who will take changes described in this issue into account. Purchasing is less and less a subject for buyers only.