Organization of the supply area and its impact on purchasing activities

Data from the 1995 Center for Advanced Purchasing Studies (CAPS) focus report on purchasing's organizational roles and responsibilities was used to examine the involvement of the supply area in major corporate activities, the use team-based purchasing techniques, and functions that report to purchasing. A number of organizational factors was found to influence the role of purchasing within the firm, including status and related work experience of the chief purchasing officer (CPO), and the degree to which the supply area was centralized. Overall, respondents indicated that purchasing had a low level of involvement in major corporate activities, despite previous research that demonstrated the value of the supply function as a competitive weapon. The study also found that a surprisingly large number of firms appointed individuals to the position of CPO without prior purchasing experience.