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A Brief History of Procurement: Golden Ages Past and To Come


02-Feb-12 16:01

Procurement may not be the oldest profession - we all know which one that is, and Procurement should probably not try to compete with it - but, Procurement’s history through the ages worth telling as it can be traced back to the Egyptians and shows an interesting developing path through the ages.

 

Back in 3000 BC, pyramid-building Egyptians tracked the supply of building materials and workers on papyrus rolls.

 

There was no Procurement as such, but Procurement was a part of the project manager’s job on these huge projects.

 

Scribes would write down the orders and track their fulfillment. Already then one could argue that strategic and operational tasks in Procurement where separated.

 

Construction, war and courts were the main employers of Procurement specialists for most of the antiquity and medieval age. For medieval cities and palaces, the intendant was comparable to a CPO, responsible for securing supply of all goods needed and often one of the most important counselors of the ruling lord. Procurement activities were then very strategic.

 

With the industrial revolution, Procurement further gained in importance, finding its way into the emerging business world. In 1887, Marshall M. Kirkman published what is probably the first book on Procurement: The handling of railway supplies. Their purchase and disposition. From then on, Procurement was on its way to be professionalised.

 

And then, something went terribly wrong. Ordering became one of the main tasks and Procurement went from being the strategic "intendant" to being only the operative executioner again. After a blooming age, Procurement was back where it had started in 3000 BC.

 

The world wars were a high point of Procurement activities, as most wars, but it was mostly done by the top brass, up to the President of the United States himself, taking the strategic decisions and elaborating the strategies.

 

It’s only from the 1960s on, that Procurement regained some strategic importance, with activities such as spend planning and later pooling (early 80s) appearing on its task list. But it was not until the mid 90s that supplier relationship management and strategic commodity management really emerged. Cross-functional collaboration was a big topic at the turn of the century with Procurement’s strategic importance growing and leading to the need for further integration into the company. Today, Procurement is positioning itself as value contributor and seeks ways to measure this contribution.

 

Although Procurement’s history can be tracked far back, the most crucial developments all happened in the last 30 years. That is a very short period of time and the golden age is probably still to come, with Procurement taking up responsibility for bringing-in innovation in companies with ever decreasing own value-creation depth.


Piu Staff by Piu Staff

 
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