Aug 10, 2021

Procurement: 5 checkpoints in the sector’s history

Procurement
Technology
digitisation
industry
Procurement is imperative to the world of supply chain and business. But just how extensive is its history, and how has that impacted the present day?

It’s widely accepted that the world we live in is one that will forever refuse to stay still. All eyes are fixed permanently on what lies ahead, obsessed with taking the next step forward towards a future that we will never quite reach as it will always be one step ahead. An ever-developing digitised world is just around the corner as companies and corporations lead the way in adopting transformative processes and technological advancements. So, as we persist in our endeavour to aim for something just out of reach, it’s no surprise that the importance of reflecting on past achievements and acknowledging just how far we’ve come is something that almost always slips us by. 

‘How is this relevant to procurement?’ I hear you ask. Well, the sentiment is the same and easily applicable to an industry that, without the modern-day advancements we’re oh-so used to, would fail to come to fruition. Procurement, echoing the society we live in, is an age-old sector constantly emerging and developing, day-by-day, undergoing transformational changes to enhance efficiency and improve its processes for ease and stability, always needing to stay relevant in an industry that fluctuates by the minute. 

Therefore, due to procurement playing an imperative role in the world we live in today, it’s important to take a moment to reflect on five of the most important checkpoints in the sector’s history and how they shaped the industry to suit the present day. 

  1. In the good ol’ days ...

When casting your mind back to ancient Rome or Egypt, it’s hard to associate the term ‘procurement’ with the historical societies that we view as ill-equipped and under-developed in comparison to our own. Of course, while Pharaohs didn’t scroll through Instagram nor Gladiator’s take selfies before a fight, these eras still possessed a modernity akin to that which we have today. 

Roman’s famously contributed to the concept of insurance, and their consensual contracts included sub-categories that covered legal relationships, including agency, partnerships, simple sales, and hiring workers for specific projects. Likewise, the discovery that Ancient Egypt utilised tracking methods for materials on scrolls of papyrus awards the era with the first recorded semi-professional procurement process. 

  1. Industrial innovation 

While hardly a surprise considering the Industrial Revolution is immortalised as an undisputed era of innovation for business and manufacturing, the increase in demand for machinery within the UK led to the establishment of procurement as a specialised sector. The official formalisation of the process led to its foundation as a key pillar in the industrial industry and the introduction of “materials men” who were responsible for the procurement and transportation of supplies and ensuring the offset of manufacturing costs through the negotiation of prices. 

  1. Necessity fuels transformation

Historically, war has always driven technological advancements. And while it may come as a bumpy ride along the way, ultimately, the industry booms due to the crucial role procurement plays in ensuring operations run smoothly and efficiently, resources are required, and the manufacturing industry is able to keep pace with the ongoing demand for new and improved manufacturing. 

Just as important to note is procurement’s lows as much as its highs. Periods such as the Great Depression heavily impacted the sector, dwindling demand and temporarily halting advancements as procurement was relegated to a smaller, more inconsequential role in the purchasing and supplying of commodities. With the decreased need and ability to obtain goods and services, procurement was provisionally pushed to the side. But, as the saying goes, what doesn’t kill you makes you stronger

  1. Welcome to the internet

Hurrah, the internet is here! With the rise of the digital age comes a new business industry built on the premise of right-here, right-now. Enhanced efficiency, improved accuracy, increased competition, all factors which now had to be addressed in an industry that, to date, had progressed relatively steadily. But, with the opportunity now awarded to companies to source more thoroughly and search for alternative solutions, the pressure on procurement built as the industry learned how to be flexible and far more systematic in its approach. 

Those who were willing seized upon the chance to revolutionise the procurement process, utilising an occasion of innovation to fuel the fire needed to jig up an industry that had no option but to adapt. 

  1. Back to the future 

Returning to the present day, procurement is thriving. Technological advancements and the introduction of AI has radically reduced time and pressure on the procurement process, the launch of supplier risk management allows suppliers to sit back and relax, and improved data and analytics means evaluation and subsequent optimisation are easily achievable. 

Procurement is now an established part of almost every business, be it from goods to services to people. It’s embedding into the industry has been consistently progressive and never insignificant. The role it now plays is vital. 

It’s needless to say that procurement will continue to be flexible and develop depending on the ever-changing business landscape. But, every now and again, it’s important to reflect on just how long the process has been prevalent within the sector and the extent to which it has become an imperative part of the supply chain industry and, indeed, daily life.

 

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