PRODUCTION PLANNING & CONTROL, 1998, VOL. 9, NO. 6, 611±618 Improving the e ectiveness of purchasing in a small company: a case study D. PERKINS and A. GUNASEKARAN Keywords purchasing, SMEs, case study, recommendations Abstract. This paper deals with improving the eectiveness of purchasing in a small company. The purchasing has a tremen- dous in¯uence on the performance of manufacturing, as most of the companies purchase about 60% of the components and raw materials from suppliers. Also, the contribution of Small and Medium Enterprises ( SMEs) to national economy is signi®cant. Realizing the role of purchasing in SMEs, an attempt has been made to present the experiences of improving the eectiveness of purchasing in a small company located in Germany. The proposed purchasing system in the company has been suitably embedded with the current MRP system. In addition, recom- mendations for improving the eectiveness of purchasing in SMEs are presented. 1. Introduction Purchasing is of vital importance in manufacturing because materials and components form a signi®cant part of product costs. The eectiveness of purchasing improves the overall productivity of the manufacturing organizations. Purchasing management has received increasing attention in recent years because of its tremen- dous in¯uence on the production capabilities of the ®rm ( Scully and Fawcett 1994). A number of articles has been published on the practice of purchasing. However, most of them deal with large-scale industries. Nevertheless, SMEs play a major role in the national economy. Authors: D. Perkins and A. Gunasekaran, Department of Manufacturing and Engineering Systems, Brunel University, Uxbridge, Middlesex UB8 3PH, UK. D ouglasP erkins is currently with the Department of Manufacturing and Engineering Systems at Brunel University, UK. He worked in manufacturing industries for more than 15 years before he returned to academia. He brings a rich experience of improving manufacturing productivity to the academic pursuit. His main areas of research interests are business process reengineering, just-in- time and productivity improvement. Mr Perkins has travelled widely to consult companies. A. G unasekaran is a Senior Lecturer of Operations Management in the Department of Manufacturing and Engineering Systems at Brunel University, UK. He was awarded a PhD in Industrial Engineering and Operations Research from Indian Institute of Technology, Bombay, India. He has over 75 articles published in International J ournal of Production Research, International J ournal of Systems Science, International J ournal of Operations and Production Management, Computers in Industrial Engineering: An International J ournal, European J ournal of Operational Research, J ournal of Operational Research Society, International J ournal of Production E conomics, Computers in Industry: An International J ournal, International J ournal of Quality & Reliability M anagement, International J ournal of Computer-Integrated M anufacturing , etc. He has presented over 40 papers in conferences and given a number of invited talks in more than 20 countries. He is on the Editorial Board of many inter- national journals. He has edited special issues for a number of international journals. Dr Gunasekaran has been involved in several national and international collaborative projects that are funded by private and government agencies. He is currently interested in researching Agile Manufacturing, Concurrent Engineering, Manufacturing Strategy, Supply Chain Management, Computer-integrated Manufacturing and Total Quality Management. 0953-7287/98 $12 . 00 Ñ 1998 Taylor & Francis Ltd.