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5 Key Periods in Procurement History

5 Key Periods in Procurement History

CPO

5 Key Periods in Procurement History

March marks National Procurement month across the world and to mark the occasion we have a number of blogs being posted across March outlining its history, the fundamentals and what we can expect in the sector for the next 12 months and beyond.

 

While roles like CIO and CISO have only become necessary with the arrival of the internet, the role of procurement has been crucial for business and industry for centuries. And despite it being low on people’s career trajectory and argurments whether the CPO role should sit under the CFO, it’s fair to say that without it, the world today would be very different. Here are 5 key periods in procurement history.

 

1) In Ancient Times

Egypt, Greece, Rome. China, Mesopotamia. All these ancient civilisations produced pieces of architecture that have stood the test of time and are regarded as some of the greatest pieces of work and inspiration ever created. And not one single computer was used for any of them. Procurement on the other hand has its fingerprints across every single one of them.

 

The Egyptians would track orders for materials on scrolls of papyrus, effectively becoming history’s first procurement professionals. The Romans gave the world insurance and the means for varying contract categories. And every civilisation provided their own variations of supply chain management, sculpting how the process would run for centuries to come.

 

2) The Industrial Revolution

The rise of machinery and the assembly line in the UK led to procurement becoming a specialised area of industry rather than a task that simply needed to be followed. This led to the introduction of so called ‘materials men’, men of great responsibility who would control the acquisition and transportation of supplies as well as negotiating prices of material in order to offset manufacturing costs.

 

This resulted in the procurement function being officially formalised into organisations to stand alongside the other high ranking members of businesses, such as the ‘Supplying Department’ of Britain’s railway network.

 

3) The Great Depression and World Wars

The rises and falls in industry felt during both World Wars as well as the Great Depression in the United States between the conflicts, saw the fortunes of the procurement function also go through many ups and downs. During the wartime booms, procurement was seen as a vital part of operations for the majority of companies, leading to it becoming professionalised.

 

However, in the darker times procurement was relegated to a minor role as the need for purchasing supplies and property was greatly reduced and those in employment in that area were reduced to basic clerical status.

 

4) The Internet Age

The rise of the internet and computers meant that every function of business greatly improved in terms of visibility and productivity. In procurement, the focus shifted from finding the cheapest option to aspects such as quality, speed and dependability. Companies were able to search more thoroughly, source better and provide better solutions across the board.

 

As a result, procurement again became a very important part function within an organisation, giving those people within the ability and confidence to take the reigns in front of stakeholders, customers and suppliers, stay in constant contact and drive results beyond improving the bottom line.

 

5) The 21st century and beyond

Since the turn of the century, the rise of technology has continued to improve the procurement function; automation allows the simple tasks to be completed in minutes rather than days, supplier risk management systems provide piece of mind, social media allows staff to stay in contact with their consumer base and suppliers, data and analytics allow to better decision making and startups and new businesses are constantly bringing new products to market which in the right hands can create new opportunities never before conceived.

 

And there’s is no slowing down when it comes to these new technologies and innovations, meaning that the procurement role is set to continue to be a key part of business and will hopefully encourage those with transferable skills to consider the field, bringing in a potential new wave of procurement in the near future.

 

Sources
https://www.jaggaer.com/gb/procurement-through-the-ages/
https://blog.procurify.com/2015/11/19/a-brief-history-of-procurement-key-points-from-past-and-present/

 

Learn more about our upcoming CPO Event in September 2020 here.

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By Richard D’Cruze, Managing Director at Pagero

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