The Use of Procurement and Supply Management Tools and Techniques

Abstract

In recent years there has been a marked increase in the attention given to the issue of operational efficiency. All of these tools seek to obtain more from a firm’s inputs by driving down its cost base and, consequently, achieving higher levels of profitability. This growing preoccupation with operational efficiency can be dated to the competitive challenge mounted by Japanese companies in the 1970s and 1980s. For a while Japanese firms in some industrial sectors were so far ahead of their Anglo-Saxon and Continental European counterparts that they were able to simultaneously offer customers lower prices and superior products. The source of Japanese competitiveness in this period cannot be traced to a single source. However, one feature of Japanese management practice that does stand out then, and now, is the emphasis that it has traditionally placed on external resource management. The Japanese appear, when compared with other cultures, to have placed procurement and supply management issues at the core of their business model.