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Because the U.S. Air Force spends over one-third of its budget on nonweapons purchased goods and services, such purchases are a prime target area in which to seek performance improvements and cost savings. Prompted by a need for improved performance from its supply base, the Air Force has become increasingly aware of the advantages of using market research, contract consolidation, supply base rationalization, and other leading purchasing and supply management (PSM) practices in its dealings with suppliers. To aid the Air Force in its PSM efforts, RAND examined how innovative commercial firms implement such practices in their purchases of good and services. After a review of the academic and trade literature, the study team conducted a series of elite interviews using a structured questionnaire to gather primary data from best in class commercial firms. The key findings are that (1) innovative commercial firms are moving to a strategic, goal-oriented approach to PSM, (2) implementing new PSM practices can take a number of years and often requires significant, permanent change throughout the organization, and (3) the Air Force needs strategies to sustain continuity of support for serious PSM change from one leadership team to the next.

Table of Contents

  • Summary

  • All Prefatory Material

  • Chapter One


  • Chapter Two

    A Strategic, Goal-Oriented Approach to Purchasing and Supply Management

  • Chapter Three

    Formal Implementation Programs to Support Successful, Permanent Change

  • Chapter Four

    Findings Relevent to the Air Force

  • Appendix A

    Supply Management at John Deere

  • Appendix B

    Skills that Effective Purchasing and Supply Management Personnel Need

  • Appendix C

    Bristol-Myers Squibb Purchasing Initiatives

  • Appendix D

    General Background on Developing and Using Information About Best Commercial Practices

  • Appendix E

    Examples of Strategic Supply-Base Reduction

  • Appendix F

    Interview Questions

  • Supplementary Materials

Research conducted by

The research reported here was sponsored by the United States Air Force.

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