Developing purchasing's foundation

Journal of Supply Chain Management, Spring, 2008 by Michiel R. Leenders, Harold E. Fearon

In 1933 there were only nine schools offering separate courses in purchasing. Purchasing was included, however, as a part of other courses in 25 schools. Within 5 years, purchasing was being given as a separate course in 24 schools, and 63 schools included purchasing topics in various other courses.

Commercial Bribery

The N.A.P.A.'s long fight against commercial bribery, involving co-operation with the Federal Trade Commission and various state agencies, received a boost in November 1933. President Roosevelt in an executive order interpreting commercial bribery provisions of all NRA codes said: "No member of the industry shall give, permit to be given or directly offer to give anything of value for the purpose of influencing or rewarding the action of any employee, agent or representative of another in relation to the business of the employer of such employee, the principal of such agent or the represented party, without the knowledge of such employer, principal or party. Commercial bribery provisions shall not be construed to prohibit free and general distribution of articles commonly used for advertising except so far as such articles are actually used for commercial bribery as heretofore defined."

In the Bulletin, George Renard pointed out that "The N.A.P.A. with several other organizations has been sponsoring such a law for more than ten years. Another complete project" (Farrell 1954, pp. 118-19).

Russell Forbes

The aforementioned Russell Forbes was referred to by Farrell as follows: "A major contribution to purchasing in general and to governmental purchasing in particular was recognized at the (1934) convention by the award of the Shipman Medal to Russell Forbes, former assistant secretary of the association." Forbes was cited for "brilliant research work in governmental purchasing ... for authorship of laws ... covering public buying ... for zeal and effort in serving as consultant on matters of public buying ..."

At the time of the award, Forbes was Commissioner of Purchases for the City of New York. He had helped write those provisions in the city charter setting up a centralized purchasing department, and had in effect been told by reform Mayor LaGuardia, "you wrote the act, now you administrate it. The offer of the post had come almost simultaneously with one from New York University that might have made Forbes a dean at the university. He passed up this 'chance of a lifetime,' and out of a sense of duty and adventure took the New York City job in 1933" (Farrell 1954, pp. 120-21).

The Scope of Purchasing

The N.A.P.A. Pamphlet 22 in 1935 showed the results of research by Professor Erwin H. Schell of MIT on the topic of responsibilities of purchasing departments.

E.H. Schell in commentary on his research raised the issues of status and scope of purchasing; a clear predecessor to supply chain management.

"When is it proper to give a high rank to an industrial function? The answer turns on the fundamental fact that industry is inherently made of human stuff. Those functions, which report to the higher officials as a matter of natural right are those which enjoy intimate and exclusive relationship with some distinct and important group of individuals to whose interest the company directly administers. The sales executive enjoys this relation to the customers who constitute the company's market; the financial executive likewise to the fiscal interest, the production executive to the operating employee group, the technical executive to the creative, scientific and engineering group. The purchasing agent enjoys this relation to that inescapably essential group--the suppliers of the company's material requirements.