The strategic role of the Procurement function in manufacturing firms has received
increased attention in the literature over the past two decades. Before the 1970s, the
supply environment was seen to be stable for most firms, with no particular strategic
opportunities or threats. Procurement was treated as an administrative or service
function. The oil crisis in the early 1970s changed the situation, bringing in its wake
acute inflation and material shortages. The 1980s saw a revolution in manufacturing
with the advent of JIT, increased automation and global operations. Theoretical
researchers saw the potential for a proactive and strategic role for the Procurement
function. This was, however, not reflected in empirical research, which failed to find
consistent evidence of firms considering Procurement as strategic. This thesis
addresses the gap between precept and practice evident in the literature.
A major criticism of the empirical literature is the treatment of the strategic (value)
activities on the supply side and the activities of the Procurement department as
synonymous. This thesis questioned that view and made a distinction between the two
activities. A theoredcal framework was built up from the literature to identify the
contexts in which Supply considerations would be strategic. Propositions were
generated which allowed for strategic Supply activities both through the Procurement
department as well as outside it. The empirical work looked at 25 UK manufacturing
firms through the case study approach. The cases were scrutinised for evidence of
strategic activities on the supply side, as well as the strategic importance of the
Procurement department.
The results confirmed that (1) Supply considerations were strategic for a majority of
firms. (2) Strategic consideration of Supply depended on a number of contingent
variables.(3) Strategic Supply activities were not necessarily reflected in the strategic
importance given to the Procurement department