Procurement management as an academic discipline gained popularity in the 1970s due to the popularity of transaction cost economics in business operations (Williamson, 1981). The transaction cost economics theory holds that a firm could benefit from economies of scale, learning effects and lower cost by procuring supplies externally. Procurement management thus has had, traditionally, a strong focus on cost reduction, through excellent negotiating tactics and competitive contracting.

Today, many researchers and practitioners still hold and argue that procurement managements added value predominantly lies in cost reduction. Do you agree with this argument?