Leading Edge Approaches To Training And Developing Purchasing Professionals
Richard R. Young, Ph.D., C.P.M.
Richard R. Young, Ph.D., C.P.M., Assistant Professor and Joseph L. Cavinato, Ph.D., C.P.M., Associate Professor
Virginia F. Tucker., Ph.D.
Virginia F. Tucker., Ph.D., Director of Executive Programs, The Pennsylvania State University, University Park, PA 16802, 814/865-1866
81st Annual International Conference Proceedings - 1996 - Chicago, IL
Abstract. This research identifies seven categories of training and development activities in purchasing. Ranging from the highly tactical to the strategic, these are illustrative of the broadening scope of purchasing's responsibilities, particularly those that are boundary-spanning in the development and maintenance of supplier relationships. Findings suggest that limiting training to the lower, or tactical levels, while clearly comfortable for many purchasers, may actually serve to imperil the future of the function in individual firms.
Background. Generic executive education has demonstrated a clear trend in the evolution of expectations among participants with the result being a decided shift in the actual delivery mechanisms utilized by successful programs. Although Figure 1 illustrates this trend, it is not intending to suggest that the older models are obsolete, nor that they have totally disappeared.
Spectrum of Training and Development in Executive Education
|Training||Transfer of detailed skills||What is||Up to 1979|
|Workshop||Fill in details of what they already know in part||Cause & effect relationships||1980-1984|
|Seminar||Understand the world. Crystal ball and help them look forward||What could, will, or might be||1985-1989|
|Development||Help them change their thought processes for personal and professional growth||How to handle the 1989-1992 world|
|Action Learning||Tao-like approach. Help prepare them through growth experiences for need or the journey they face.||Insights into other 1992+ tools and views (often outside their knowledge sphere)|
Clearly, this model suggests a migration from the tactical to the strategic, but needs to be overlaid with the training and development needs of the purchasing profession. Nevertheless, the model is emblematic of the transition through which purchasing has been passing for some time. At the lowest level, buying has always been a transaction-focused activity which only reacts to demand determined by others, while purchasing as a wider definition seeks to influence demand in pre-requisition activities. Most recently efforts to label the broadened roles have used terms such as "supplier manager" and "supply market manager."
Purchasing Training and Development Taxonomy. Recent research into the types of training and development undertaken by purchasing professionals reveals a shift suggesting a more strategic focus. Paradigmatically this moves purchasing training away from the question of "what is" towards those which address the question of "what will be?" Types of training and development are further segmented into the following seven principal groups. The first five address the "what if" question; the remaining three, "what willbe?"
- Operational Competencies. These include the basic tools of the trade including supplier selection and evaluation, make or buy analysis, value analysis and value engineering, effective competitive bidding approaches, elements of cost and price analysis, negotiation techniques, computer applications in purchasing, and the ubiquitous "Basics for the Newly Appointed Buyer." Aside from some modest repackaging, little has probably changed with these offerings during the last twenty years.
- Client-Oriented Expertise. In layman's terms these are the courses that provide purchasers with an understanding and the language associated with the activities of their requisitioners. In the pharmaceutical industry it may be a course in good manufacturing practices (GMP's); in other industries, packaging fundamentals or production processes and may include MRP II and just-in-time training.
- Management Skills. Traditionally much of this emphasis is on human resource issues such as hiring and firing, employee appraisal, objectives writing and measuring, effective communication, and equal employment opportunity compliance. More recently issues have focused on effective team building, nominal group techniques, and problem solving.
- Parallel Function Knowledge. Professional purchasers claim to also be spending training budgets on courses in budgeting, managerial accounting, "Finance for the Non-Financial Manager," and quality control, especially statistical process control methods.
- Benchmarking and Environmental Scanning. Increasingly purchasers have demonstrated a need to know how well they are doing. For the past ten years courses teaching competitive and non-competitive benchmarking techniques have been popular, however, the ability to interpret the direction of supply markets by reading current events data, whether economic indicators or international public policy decisions has also shown interest by purchasers.
- Purchasing Awareness. Although the NAPM has long emphasized the strategic role of purchasing in communicating pertinent supply market data for senior management, some organizations now seek such specific training for senior purchasers. In essence, this is taking the environmental scan and interpreting those implications in terms of the strategies and objectives of the purchaser's own firm.
- Catalytic Processes. These offerings address the issues of senior purchasers effectively bringing about change in their organizations, both in a narrow sense, that is the purchasing activity, in their greater organizations, and in the broadest view--across corporate boundaries in order that supplier and even customer relationships are optimized to bring value across the entie supply chain.
Taxonomy Orientation. Certainly the above taxonomy has a progression from the tactical to the strategic. The "what is" offerings can be further segmented into functional and managerial levels. But respondent firms also suggested that an internal or external orientation is also of importance, particularly when that view is of a company or a functional perspective. To clarify this point, internal and external means inside and outside the company, respectively. Intra-organization and inter-organization means inside or outside the function. Figure 2 attempts to establish a two dimensional segmentation of training and development offerings within this context. (Figure 2 - Purchasing Training and Development Orientation Versus Focus - not available in this text-only version.)
Who Receives Training? In earlier models, most training and development focused on the lower strata of the purchasing organization, but with higher strategic emphasis being placed on courses, there appears to be a shift with the realization that the entire purchasing activity requires an exposure to continuous training at all levels of the taxonomy. This is not to suggest that everyone universally receive training at all levels, but rather that strategic development for senior purchasers will ultimately impact the decision-making for course selection for more junior purchasers at the tactical level.
This is not to downplay the need for tactical training as clearly there is a need to understand the application of those tools used in the every day workings of the function. But too much emphasis on intra-functional training can lead to purchasing myopia that in turn produces a drag on the organization because of a predominantly limited inward focus on what the function alone may emphasize and measure. To quote one respondent, "we need to turn purchasers into good business people, not the entire organization into good purchasers."
Another way to consider the orientation issue is by comparing it with
that role which a particular purchasing organization or activity happens to
view itself. The result does, in fact, reveal a particular bias towards
certain types of purchasing training and development. This is captured in
(Figure 3 - Purchasing Training and Development Scope Versus Orientation - not available in this text-only version.)
While conducting the research, it was not surprising to learn that those organizations who expended the greatest percentage of their training budgets on operational competencies were the same organizations which had the greatest resistance to the concept of partnering with their suppliers. Moreover, these were the organizations which were most apt to still consider their suppliers in an adversarial light.
What Are the Drivers for Training? Once determination of the types of purchasing training and development were identified, the next issues became:
"who" drives the selection of training and development sources?
"what" triggers determine that training is required?
"when" do organizations elect to train?
The issue of who drives selection appears to be nearly evenly divided between purchasing departments themselves and human resource departments, many of whom have specific training sections. As training needs shift from tactical to strategic, however, there appears to also be a shift away from human resource involvement. One explanation provided was that human resources itself still operates in a transactional or tactical paradigm and has not been able to adapt with any sufficient urgency to the shifting requirements of their internal clients. Moreover, the ability to select appropriate training delivery alternatives requires a broad, comprehensive understanding of the functioning of the business, an understanding which frequently less than that required. The research seems to seriously question whether there will be future role for human resources-based training groups in the broad definition of purchasing training and development as strategic level training may increasingly result in the further reshaping of their purchasing organizations.
The question of "what triggers a decision to train" is bifurcated into a
macro, or organizational level, and an individual one. While individual
remedial action is one often cited trigger, the principal focus of the
research was a departmental or functional one. As a result, answering the
question of "what trigger" is nearly the same as the answer for "when
organizations elect to train." In many organizations, even those with total
quality management processes, decisions to train were not part of a continuous
improvement culture, but rather the result of some external incident.
Sometimes this resulted from major personnel shifts, a situation leading to
tactical training--give people the basic tools necessary for performance of
their jobs. Strategic training frequently was sought for problem-solving
reasons as well, including a decline in business, loss of competitive
advantage, or perceived inferior processes as a result of benchmarking. There
is undoubtedly some correlation between the question of "when to train" and
the product development life cycle, which can also be applied with equal good
effect to business practices--effective purchasing being an appropriate
example. Figure 4 illustrates this point.
(Figure 4 - Product/Process Life Cycle and Timing of Purchasing Training is not available in this text-only version.)
Rationale for training or perhaps for not training during the life of a product or a process may be explained as follows:
Introduction: Probably no training because of too few resources available. Normally a chaotic period with time as one of the most important resources.
Growth: Again, probably no training as there is little time, nor is there any apparent reason as things are usually going quite well.
Maturity: Provided that the organization is suitably astute to know that it is in this phase, training will probably occur, but will be of the "what is" variety because everyone tends to believe that incremental improvements will return the organization to a growth-like era.
Decline: In too many organizations, this is where the "what will be?" training occurs--and it does so because of the realization of the need to bring about change.
Summary. This research has revealed that there is currently a shift under way in the types of training and development required and sought by purchasing organizations. Moreover, that shift is one from the tactical to the strategic, but although two extremes they cannot be viewed as mutually exclusive and there remains a need for both. Not surprisingly this shift has occurred as purchasing activities broadened the vision of their roles.
Because of the shift within all functions, there will likely be an increasing dependency on purchasing organizations to identify needs and arrange for the delivery of their own training needs. This is in sharp contrast to the previous involvement of human resources.
Finally, the framework, or taxonomy provided by this research may prove to be a useful tool for purchasers to consider the manner in which their limited resources can be best spent in order to achieve the greatest value for their firms.
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