Strategic Management of Suppliers

For most of this century, firms looked at purchasing as a necessary but non-glamorous activity. For a firm to produce a product it had to have materials to use in the transformation process, but materials were widely available and labor represented the most important and most visible cost of doing business. As a result, purchasing was viewed as a clerical activity for order processing to trigger the inflow of materials. Likewise, suppliers were managed reactively and adversarial relationships often developed. Buyers pitted one supplier against another to get a better price. Over time (and especially in the past decade), the purchasing function has evolved into an important and potentially strategic function. Further, with the emergency of just-in-time manufacturers, the role of suppliers has changed. The trend toward developing core