After languishing as a managerial backwater for years, purchasing has finally emerged on the top management agenda at many companies. Although its new-found importance is frequently driven by a need to slash costs, some organizations are now treating purchasing as part of a broader effort to "re-engineer" such key processes as operations, quality, and customer satisfaction. Moving to such a strategic approach is not easy. It must begin with an honest appraisal of how far the function has actually evolved and of what is needed to push it on to the next developmental stage—and then the stage after that.

Even as recently as a couple of years ago, purchasing tended to be regarded as a managerial backwater. In some quarters, it still is: purchasing managers are paid less and are rarely promoted into general management; aspiring managers from other areas are reluctant to accept a stint in purchasing; and purchasing, for many companies, is simply not part of the senior management team.

Purchasing is one of the most powerful ways to enhance economic performance

Things are changing. Purchasing is thrusting its way to the top of management’s agenda, led perhaps...