Procurement in the Value Chain Approach
For long the value chain approach by Michael Porter and as advanced by Peter Hines has placed procurement on the periphery, bundling it with general administration among other things.
Today, with threats of resource depletion, increased intervention of government in supply markets, political turbulence and technological advance (Kraljic
, 1983), the days of no surprises have ended
and supply arrangements can be disrupted any moment.
There is need for redirection of the focus on competitive competences that can be built upstream rather than downstream
because if anything, the upstream activities of any firm are a mirror of the downstream activities. The focus must be on procurement and like many other functions, a number of which probably their time is up in the boardroom, procurement must join the league of boardroom players.