Purchasing for lean production: the new strategic agenda.

Purchasing has until recently occupied a relatively obscure position in most companies, and has been perceived primarily as a stand-alone function dealing at an operational level with the ordering and delivery cycle of materials from suppliers. Fortunately, this is not the case with a small but growing minority of companies where purchasing is now becoming the new architect of value stream excellence.

It is no coincidence that these organizations see their individual supplier networks (of both direct and indirect firms) as a key source of competitive advantage, having already successfully implemented a Total Quality Management (TQM) approach internally. It would also be true to say that while these firms come from a variety of industrial sectors and national origins, they are most commonly found in the Japanese discrete parts manufacturing industries, such as automotive and electronics.

The success of such Japanese firms is now well established.[1] However, their success has usually been attributed to their internal manufacturing systems such as the Toyota Production System (TPS) and the Canon Production System (CPS). It is, however, the author's belief that while this was undoubtedly the case at first, a large part of their continued long-term success can be traced to the integration of their key internal processes with those of their suppliers, and the rapid development of the latter community of firms.

The purpose of this article is to discuss not only how these lean producers integrated their suppliers into their activities, but also how the purchasing function played a pivotal role in this process. A subsequent discussion defines a new strategic agenda for purchasing within the lean production system and as a result extends the lean production philosophy to include the many-tiered supplier network.

STRATEGIC PURCHASING - A RAPID EVOLUTION