THE HISTORY OF PROCUREMENT: PAST, PRESENT AND

FUTURE
Did you know March is National Procurement Month? According to NIGP,
The Institute for Public Purchasing, this month is 'a time to celebrate with
pride the role of the public procurement profession.' Procurement
professionals deserve thi sacknowledgement, playing vital roles not just in
the public sector but within organizations across virtually all industries.
However, the procurement field has not always been thought of as a
strategic function. When taking a look through the history books, it is clear
that procurement's organizational role continues to evolve.

PROCUREMENT AND THE PYRAMIDS

The first traces of procurement can be seen throughout ancient history,
including the Egyptians in 3,000 BC. Though there was no designated
procurement function, materials management aided in the building of the
pyramids. The Egyptians used scribes to manage the supply for these
massive projects. Scribes played a clerical role, recording the amounts of
materials and workers needed on papyrus rolls. These scribes would track
orders through fulfillment and were one of the first known in history to be in
the procurement profession.

PROCUREMENT REVOLUTION
Procurement’s organizational role was not truly recognized until the 1800s.
One of the earliest acknowledgements of the procurement function can be
found in Charles Babage’s 1832 book, On the Economy of Machinery and
Manufactures. He points to the need for a ‘materials man’ in the mining
sector who selects, purchases and tracks goods and services required.
Essentially, Babbage called for a centralized procurement officer.

During the Industrial Revolution, procurement solidified its importance.

Marshall Kirkman’s 1887 book The Handling of Railway Supplies - Their
Purchase and Disposition, detailed procurement’s strategic contributions to
the railroad industry, specifically in acquiring goods from developed parts of
the country and bringing them south and west. In 1886, the Pennsylvania
Railroad gave departmental status to the procurement function, referring to
it as the ‘Supplying Department.’
PROCUREMENT SHIFTS AGAIN
Unfortunately, the World Wars forced procurement initiatives to shift back
away from a strategic role to strictly clerical. Due to the scarcity of materials
during war, procurement revolved heavily around order placement. During
wartime and the depression, the objective was to obtain enough raw
materials, services, and supplies to simply keep the economy running.
It was not until the mid-1960s that procurement once again took on
managerial role, on a wide-scale. The concept of material management
became the focus during this period. Procurement professionals
emphasized competitive bidding, with price becoming the determining
factor for most contracts. An increase in trained professionals during this
time period helped procurement on its way to regaining departmental
status.
The 1980s saw a significant increase in supplier competition. This gave
organizations the luxury of putting more focus on supplier quality and
dependability. Supplier management became an important factor in
procurement and remains so today. By the late 1990s, the role of
procurement had begun its transition into strategic sourcing. Procurement
officials looked at supplier as partners and long-term contracts were
encouraged. This was the beginning of procurement’s modern day
evolution.

PROCUREMENT TODAY AND INTO THE FUTURE

Today, procurement professionals are instrumental to the success of
organizations. They’re responsible for an umbrella of initiatives from the
development of a solicitation to the evaluation of and working with qualified
suppliers, and everything in between. Ultimately, procurement is having a
significant impact on an organization’s bottom line – solidifying its spot at
the management roundtable. In the 1960’s a CPO (Chief Procurement
Officer) was unheard of; today, more and more procurement heads are
helping their organization develop and reach strategic and operational
goals.
New technologies continue to evolve procurement. E-procurement
solutions, are creating a more efficient approach to strategic sourcing. With
the shift towards strategic sourcing, e-procurement bid and vendor
management software save the organization time so that it can focus on
organization initiatives and supplier relationships. SourceSuite’s cloud-
based bid and supplier management platforms configure to meet the
purchasing needs of virtually any organization. Currently, SourceSuite
streamlines the purchasing process for over 900 buying organizations
across the country.
Though procurement has a long history, its role as a strategic part of the
organizational structure is still relatively new. Procurement’s quick evolution
through the last 30 years can be credited to many of the professionals we
are celebrating this month. In the years to come, it can be expected that the
procurement function will only continue to develop and expand its ability to
directly impact successful organizations.
Mike Nolan | SourceSuite.com

A Brief History of Procurement:

Key Points From Past and
Present
Brittany Whitmore


Although historical accounts are spotty at best, procurement practices have existed for

thousands of years. It’s evolved from a function of subordinates to one that’s been elevated to a

management level. It’s garnered such importance in the business world that major companies
dedicate whole departments and executive positions to procurement (maybe even one you

hold). Despite these changes, the types of challenges addressed by procurement—from

scarcity of supplies to competition—have mostly remained the same. Here’s our breakdown of

procurement form the early years to present day to give you more insight on this ever-evolving

industry.

Early Years in the History of Procurement

The practice of procurement-related tasks dates back as early as 3,000 BC. In Egypt, scribes

responsible for pyramid design also functioned as clerks, using papyrus to record the amount of

labor and materials needed for construction. Ancient Romans also used scribes to create

contracts when the empire was engaged in trade with private suppliers. In Great Britain,

procurement’s history dates back to William the Conquerer, who wanted a concise way to

record tax collections. The practice evolved to incorporate goods and services with the rise of

the British Empire and its colonial pursuits.

Industrial Revolution

Photo Credit: Gianluca Di natale

Procurement received greater importance during the Industrial Revolution when the practice

became more than part of a worker’s skill set, but a job function all its own. When plants needed

resources to help manufacture their products, many of them wound up hiring “materials” men to

handle the acquisition and transportation of supplies. This often meant strategic thinking in

negotiating with suppliers for the best possible price to offset manufacturing costs. Sound

familiar? Some things never change.

20th Century

Though headway had been made in terms of elevating procurement-focused jobs, even during

the 20th century, these roles were still seen as a lowly function, especially during the two World

Wars when the practice was reduced to clerical status. However, by the 1960s, with the
economy finally on the upswing, the business world recognized procurement as a management

function, especially with it came to competitive bidding for supplies. Education in pertinent areas

in supply chain management created professionals who were able to engage in supplier

competition. Their ability to gauge supply variables like price, quality, durability and availability

became even more critical to a company’s well-being.

The Information Technology Boom

Photo Credit: StockSnap

With the creation of the Internet, procurement took on (and continues to take on) an even more

dynamic role in the late 20th century, engaging in B2B e-commerce transactions. The pace of

activity became even faster with improvements in software that have continued to the practice of

procurement more thorough and accurate.

The social status of those involved in procurement and the shape of the economy of the times

have been inextricably linked. During periods when the economy was sluggish, the practice was

a skill set among clerks. When the economy was more robust, procurement became a vital

strategy. Given its increased importance of late, especially with the onset of more accessible

technology, procurement may become even more important, especially when the practice can

be part of a long-run solution to an economic downturn.