7 June 2012
As the institute celebrates its anniversary, SM looks at its achievements from 1932 to 2007 and continues with a look at the past five years
Who in 1932 could have predicted how the Purchasing Officers’ Association (POA) would develop? Not many could have foreseen 66,000 members in 150 countries in 80 years.
In the 1920s, 15 companies set up the Management Research Group No 1. Its purpose was to discuss topics of mutual interest. By 1929, this group had formed a buying section, inspired by the US-based National Association of Purchasing Agents (NAPA). Leonard Swinbank was controller of purchases at ICI and a NAPA member. He contacted the buying section and they held a meeting on 13 May 1931. The seven people around that table decided to establish a British association. By autumn 1931, a constitution had been drafted and annual membership fixed at three guineas.
The first AGM of the British Industrial Purchasing Officers’ Association (BIPOA) was on 8 June 1932, with Swinbank elected founder president. POA was formally incorporated in 1935, with a Memorandum and Articles of Association. By 1939, the POA had a raft of colleges signed up to deliver purchasing-related education, but the second world war intervened. At the outbreak of war, the POA had several hundred members, a part share in its own magazine, a promising education scheme, an annual dinner and a national conference – all the elements of a professional association.
War saw the association evacuated to Bath. Of the nearly 500 members, about 100 served in uniform, although there is no list of casualties in the profession.
Unlike in the US, the UK Ministry of Supply and other bodies made no formal effort to work through POA. Yet many buyers were drafted into the war supplies effort.
By 1946, the first elements of an education scheme were announced, running co-operatively with the Institute of Industrial Administration. Some 40 technical colleges were initially involved.
The first issue of its journal came out just before the winter of 1947. In March, the second issue reported: “The country has experienced a period of crisis unequalled in living memory. Purchasing officers have had to deviate their energies to the procurement of diesel engines, tractors and field generating sets in an effort to get some sort of power and maintain some degree of activity in their factories.”
At the June 1947 National Conference, D Wragg read a paper entitled The Purchasing Officer’s Responsibilities, opening a debate that continues to this day. With the membership having doubled, POA claimed control of £1 billion of expenditure.
In January 1949, the POA appointed its first patron – Lord McGowan, who was chairman of ICI. At the time, POA had 1,750 members and 21 branches or groups, almost all in the UK.
In August, buyers saw a relatively new phenomenon – falling prices. By 1951, the country had what was then regarded as rampant inflation, rather than deflation.
Buying and selling of many major commodities was still vested in government. The collieries, iron and steel, most road, rail and inland waterways, and many aspects of energy supply had been nationalised. Was the buyer’s role no more than to signal demand to state monopolies? POA members didn’t think so and the economic pages of the journal of the time, not to mention the correspondence between the POA and the various government agencies and nationalised industries, have a political content almost unthinkable nowadays.
The first contract to reopen on the London Metal Exchange was for tin, in November 1949, after a strident campaign in the pages of the journal. It accused the Ministry of Supply of profiteering by £5.5 million by fixing its selling prices well above world market rates. The market wasn’t fully free until the copper contract in August 1953. Until then, buyers had no option other than to buy through government agencies under onerous terms and conditions.
A perennial debate has its origins in the journal of June 1949, in a paper calling for Standardising the Purchasing Officers’ Title – a one-off campaign for which the institute can claim no success as in the late 1990s, the technical department ran off a booklet listing no fewer than 153 relevant job titles.
The Swinbank Medal, in honour of the man who, above anyone, can be considered the founder of the institute, was first awarded at the 1950 National Conference. By 1955, the event was well established. New materials – silicones, Terylene and titanium, among others – were discussed, as was the potential for East-West trade with India, China, Japan and Burma.
By 1959, the POA had more than 5,000 members, across 43 branches and groups both UK and overseas.
Europe was a big topic as the decade began – Bill Deedes (then a junior minister, later editor of The Daily Telegraph) described Europe as a “dormant giant” to the National Conference in 1962.
The Advanced Purchasing Course focused in 1963 on the likely increase in European trade, whether or not the UK joined the EC.
1962-1963 was also the first formal student recruitment year. And April 1963, the first One-Day Spring Conference coincided with the first National Dinner.
The POA and Institute of Public Supplies Officers (IPSO)collaborated much more than might be supposed. A refresher course for hospital and local government officers was run in 1962 and 1963, and beyond. At this time, some 80 per cent of the POA and IPSO syllabuses were common, which was greatly to help the subsequent merger. A joint exam board was set up early in 1966. The possibility of unifying POA and IPSO was announced at the National Conference. The two institutes had merged to form the Institute of Purchasing and Supply (IPS) on 19 June 1967. The first president of IPS was Mike Taylor, group purchasing controller at Metal Industries.
“The pound in your pocket has not been devalued,” said Prime Minister Harold Wilson, after devaluing sterling. But for industrial buyers who were necessarily dependent on imported raw materials, this was a challenge.
The qualifications scheme was also modified to allow membership by submission of a treatise.
At the end of 1970, there was a strike in the power industry, followed in 1971 by a postal strike – in some areas the journal was individually distributed by branch members. It was a fraught year for purchasers. Rolls-Royce – where IPS had 52 members, plus students – went bust and had to be rescued by the government. Ford workers rejected a 14.2 per cent pay offer. Oh, and VAT was introduced.
In 1972 proposals were published for reorganising local government. To IPS’s dismay, “purchasing was almost ignored”.
It was clear that Royal Charter status would depend in part on IPS becoming significantly more representative of the purchasing profession as a whole. The arguments are interesting: “Purchasing is about acquiring, which is passive: procurement is about spending, which is active.” Council responded: “The definition of what procurement entails will be bounded only by the initiatives of individuals and the circumstances in which they find themselves. The function itself is unable to offer any resistance.”
Female membership had been slow to grow, so the Liverpool branch felt it important to report it now had three women on the committee (two from the public sector, and one from Plessey).
Also important at this point was the development, and eventual promulgation, of the Code of Ethics by which IPS members would agree to be bound. The ultimate objective – of becoming a truly representative institute that would merit a Royal Charter – was never lost, but these were difficult times – rampant inflation, industrial strife and the retrenchment in British manufacturing that meant many members were out of a job.
In 1977, it was envisaged that a Royal Charter might take 10-15 years to achieve (accurate as it turned out), but public recognition equivalent to that of other comparable bodies might take 20-30 years (you judge).
Research shows that IPS members spent £75 billion a year (£54.5 billion in the UK) at July 1977 prices. In 1978, IPS launched a Price Monitor service. It was important enough to be condemned by Roy Hattersley, secretary of state for prices and consumer protection, as it suggested that prices, especially of inputs, were rising at a much faster rate than the government recognised.
One of the first actions of the new Thatcher government, in 1979, was to scrap the Prices Commission. IPS had been very active in making representations to that body and was cautious about the effects of its demise, but saw that a freer market “gives opportunities for purchasing and supply to prove its value”.
This period saw huge growth in overseas membership. There were difficulties serving members, especially in countries such as Nigeria where it could take three months for the journal to pass through customs. Nonetheless, African members were adamant they wanted to see ever-higher standards. Council took these views on board when it considered the changes that appeared necessary to obtain the coveted Royal Charter.
The Golden Jubilee of the POA was celebrated in 1982 and the National Conference reached its height. A breakout session on ‘computer applications’ marked the first realisation that the profession was going to have to engage with the electronic age.
In 1983, the institute moved from leasehold property in Ascot to a freehold in Easton on the Hill, near Stamford in Lincolnshire. Not only did this free the IPS from uncontrollable property costs, it also bolstered the bank balance. New premises allowed new systems. Membership records had been computerised in 1981, but a new editor, Mark Barrett, saw the scope to use technology to reduce cost and improve quality in the journals.
The ‘green’ or ecological movement started to be reflected in journal articles and IPS activities. The 1988 National Conference took the theme ‘strategic purchasing’, and from then can be dated the modern profession’s view that purchasing and supply is about much more than functional excellence. This wider viewpoint would in time demonstrate itself in exam syllabuses, journal content, technical and professional activities and, indeed, the way the profession is presented to the wider world.
A Central Unit on Purchasing had been established and in 1989 the outgoing head, Mike Willacy, told the journal: “Value for money improvements of £252 million, or 3.9 per cent of reported expenditure, had been achieved.” The Civil Service in 1989 announced that purchasing was to be an established and recognised career path. The IPS was not slow to devise training courses.
A new publication, the Report on Business, carried the Purchasing Managers’ Index, developed in collaboration with analysts NTC. Initially, the focus was on manufacturing – separate reports on the service sector and construction were later introduced. The report was an immediate success, influencing Treasury and Bank of England decisions because it captured the forward intentions and expectations of buyers and almost guaranteeing a monthly mention for the institute in any serious business paper.
In 1992, the Diamond Jubilee year of the old POA, the long-sought Royal Charter was granted – on 15 July IPS became the Chartered Institute of Purchasing & Supply (CIPS). Membership was now around 21,000 – enough to allow the institute to claim to be representative of the profession.
In 1996, the NVQ level 4 was launched, which matched the full academic requirements for Corporate Membership. In 1999 there was another revision of the qualification scheme and a simplification of the membership structure to five categories: Associate, Member, Fellow, Affiliate and Student. In 1998, there was the first formal graduation ceremony. Finally, in 1999 the supervisory-level qualifications were replaced by a Certificate and Advanced Certificate in Purchasing & Supply.
Government inadvertently gave a major boost to the public perception of purchasing through its public sector proposals on Compulsory Competitive Tendering and Market Reviews. From then until now, public purchasing, contracting and ‘value for money’ have rarely been off the front pages.
CIPS appointed honorary regional officers to help branches survive and develop, leading to the appointment of membership development managers in selected areas, with some success. A degree of ‘regionalisation’ of branches was piloted in 1997.
In 1995, the first three-year business plan was approved, with robust measures to judge how effectively CIPS was doing.
Publication of the in-house journal was outsourced to a London firm that produced the journal of the Chartered Institute of Personnel & Development. The result, from March 1996, was what we have today, this monthly journal, Supply Management.
2000 and beyond
CIPS saw in the decade with the launch of a 400-strong Hong Kong branch. A regional group formed in Africa, bringing together branches in Zimbabwe, Botswana, Malawi, Uganda, Kenya and Zambia.
In 2000, the Kellys/CIPS awards were launched. These have now become the CIPS/SM Awards, growing to attract more than 900 guests. The first female president, Jeannie Bevan, was appointed in November 2001 and by the end of her tenure, 70 years after the inception of the POA, membership had hit 30,000.
2000 also saw CIPS launch its first fully functional website, giving members a new channel of communication with the institute.
The CIPS Timeline
- Autumn 1931: Constitution drafted and annual membership fixed at three guineas – unchanged until 1963.
- 8 June 1932: First AGM of the British Industrial Purchasing Officers’ Association (BIPOA).
- May 1936: First dinner to incorporate the Purchasing Officers’ Association (POA).
- 1939: First POA national conference held in Cheltenham; second world war sees the association’s honorary secretariat evacuated to Bath.
- 1944: Survey reports the 500 or so POA members were responsible for a spend of £500 million. With the membership having doubled by 1947, POA claimed control of £1 billion of expenditure.
- 1946: JR Blinch appointed first ‘professional’ secretary, with Harry Hughes as assistant secretary.
- January 1949: POA appoints first patron – Lord McGowan, chairman of ICI; the association’s journal goes monthly.
- 1952: Membership reaches 2,100.
- 1955: National conference discusses new materials, as well as potential for East-West trade; East London Branch hosts a talk by English Electric on ‘Electronics for Computing and Control’.
- 1962: Membership expands to 4,000; Bill Deedes (then a junior minister, later editor of the The Daily Telegraph) described Europe as a “dormant giant” at the National Conference.
- 19 June 1967: The Institute of Public Supplies Officers merges with the Purchasing Officers’ Association to become the Institute of Purchasing and Supply; Mike Taylor, group purchasing controller at Metal Industries, becomes first president of IPS; his executive vice-president was KW Vincent of the National Coal Board.
- 1972: Purchasing “almost ignored” in proposals for reorganising local government. IPS launches a wine club.
- July 1973: David Farmer becomes Europe’s first purchasing PhD.
- 1975: IPS launches the four-inch wide kipper-tie in royal blue polyester.
- 1977: Development of the Code of Ethics by which IPS members would agree to be bound; research shows members spent £75 billion a year.
- 1982: Golden jubilee year – CIPS had 17,500 members; the institute moves from leasehold property in Ascot to a freehold in Easton on the Hill, near Stamford, Lincolnshire.
- 1988: National Conference takes the theme Strategic Purchasing.
- 1989: Central Unit on Purchasing, a forerunner of the Office of Government Commerce, established.
- Professor David Ford of Bath University offers the National Conference the following view: “There is only one major challenge – achieving world-class purchasing – and this means doing new things.”
- The Report on Business carries the Purchasing Managers’ Index, an immediate hit in the commerce world, influencing Treasury and Bank of England decisions.
- 1992: The Diamond Jubilee year of the old POA; IPS receives its Royal Charter to become the Chartered Institute of Purchasing & Supply; CIPS confirms the establishment of the UK’s first chair, Richard Lamming, in a purchasing-related subject, the first to be part of a university.
- 1996: Launch of the NVQ level 4, which matched the full academic requirements for corporate membership.
- 1999: A Certificate and Advanced Certificate in Purchasing & Supply replaces the old supervisory-level qualifications.
- 2000: CIPS sees the launch of a Hong Kong branch, with some 400 members; launch of the Kellys CIPS awards, which have now become the CIPS SM Awards, growing to attract more than 900 guests.
- 2001: CIPS appoints first female president, Jeannie Bevan.
- 2002: Membership total reaches 30,000.
- 2005: CIPS Australia forms.
- 2006: CIPS qualifications overhauled and relaunched.
☛ Read the next about the next five years of history.
☛ Click here to download the 80 years of CIPS supplement in its entirety