People Strategies/Buying Strategies
Richard G. Weisman, C.P.M.
Richard G. Weisman, C.P.M., Corporate Quality Manager, Ferrofluidics Corporation, Nashua, NH 30861, 603-883-9800.
79th Annual International Conference Proceedings - 1994 - Atlanta, GA
Effective communication is the most important strategic weapon that purchasing professionals need to optimally manage the supply base. Excellent personal interaction skills, with internal and external sources, are necessary to excel in the procurement function.
Strong, sound internal relationships are mandatory to maximize supplier performance. Before any formal supply base management processes are undertaken, purchasers must have excellent support from internal functions such as engineering, finance, management information systems, and quality. Internal alliances best support purchasing in external supply base issues. Understanding and communicating clear and accurate requirements to suppliers is the first step in improving performance levels. The ability to facilitate interaction with the entire supply chain is the cornerstone of the purchasing process.
Today's buyer must develop the necessary communication skills to properly manage the supply base, and operate comfortably within all levels of both the supply chain and their own companies. As the professional continues to evolve into strategic management, purchasers need to become multi- dimensional in their approach to business.
Internal recognition of purchasing's importance is a battle that is fought long and hard on a daily basis. While the profession finally begins to feel good about being part of the strategic management team, storm clouds are brewing for the elimination of the entire purchasing function. As companies reengineer their processes, purchasing is once again being looked at as a possible non-contributor. Obviously, this perception needs to be fought with vigor.
Purchasers have opportunities on a daily basis to show value and rightfully claim a solid position in today's flattened organizations. The first task is to identify the internal organizations that need support. Then, provide excellent service to these organizations. Finally, enlist the support of these groups to aid the purchasing department in managing the external supply base. This process doesn't advocate not servicing all organizations within the company, as purchasing's value is maximized when the entire company is supported. However, there are several groups that have an impact on the supply base.
All suppliers need to be paid in a timely manner. When finance understands that the supply chain is more than an accounts payable list, positive things begin to happen. This traditional barrier becomes a resource, providing support in supplier financial analysis, helping to construct creative financial agreements with suppliers, aiding in financial analysis, and being receptive to suppliers who call with invoice or financial problems. This is a key group of which to gain early support.
Typically it is the engineering groups that feel that purchasing is a bottleneck, and, therefore it is the hardest area for purchasing to break through. However, it is the most fertile area to develop internal alliances that will provide maximum external support. Early supplier involvement (ESI) is the most critical asset that engineering can provide. Having the supplier in the loop early during the design stage allows purchasing to optimally manage the relationship, control costs, and iron out most business problems.
The opportunity to develop a relationship with engineering must be done on an individual basis. Look at every engineering requirement in purchasing as an opportunity to show value. Use these situations as a chance to sell service. Many engineers have a dim view of the purchasing profession, usually developed when a transaction went sour. Grasp the opportunity to get involved in engineering meetings. Offer to bring in suppliers to talk with them. Arrange a product demonstration, or mini trade show. Reach out! The relationships developed with all engineering groups, such as manufacturing engineering, design engineering, and software engineering, will provide excellent value in managing the supply chain.
MANAGEMENT INFORMATION SYSTEMS
Electronic data interchange, barcoding, specialized reports and computer support originate from this area. Positive relationships with MIS allows the progressive purchasing department or buyer to utilize state of the art management tools to work with the supply chain. This is a situation where good service typically begets good service.
Purchasing cannot have a closer ally than the quality organization. The two groups must act in concert when managing the supply base. There is a great need to share information, data bases, and performance issues with each other. Source inspections, supplier certifications, and dock-to-stock programs are all interwoven between quality and purchasing. Since both groups work closely in all phases of supply management, a close relationship is imperative.
All internal organizations are important. The ones discussed in this paper are but some of the groups that have an impact on the supply base. Support them all, demonstrate your value, and get involved. Solid performance will cement purchasing's value.
"ATE" STEPS TO SUCCESS
The following eight aspects of a purchasers job are key areas of excellence. Proper utilization of these steps will contribute to enhanced job performance.
A buyer who acts as an internal and external facilitator provides a key service. The buyer is in a strategic position to act as a company communicator in all purchasing and supply chain issues. The buyer must be aware and able to communicate the business objectives of their company throughout the supply chain. Purchasers must also be knowledgeable of the business objectives of the members of the supply chain and be ready to represent all parties to ensure a successful procurement process. Buyers must be able to interface with all levels of management, both internally and throughout the supply base. There is a need to coordinate efforts and issues, be a clearing house of information, and act as a mediator when the situation warrants.
Today's purchasing professional needs to shed the perception of being a low value, bottleneck causing, clerk! There are endless opportunities for success waiting to be discovered. Personal pride and motivation are the keys which will unlock those opportunities. A personal commitment to oneself and the profession is needed to continue the positive focus. Get involved in professional organizations, undertake some training, become a member of in internal committee. Just about anything helps. Open the lock that seems to chain buyers to their desks.
Never stop learning! Buyers who feel that they know all there is to know are in for a rude awakening. The world is changing quicker than anyone could have imagined, and today's buyer must be aware of specific global, economic, social, and political issues that affect their companies and their profession.
Formal education is now mandatory. Purchasers must have a college degree, or be in the process of obtaining one. The non-degreed purchaser will seldom reach great heights in the profession. While business degrees have always been popular, technical degrees are becoming commonplace. The buyer of tomorrow needs to be technically competent. Advanced degrees are now also being required by many employers. Many colleges and universities are offering courses in purchasing and materials management, certificate programs, and degree programs.
Formal education also includes professional certification. The Certified Purchasing Manager (C.P.M.), as offered by the National Association of Purchasing Management is the most popular certification in the purchasing profession. Other important certifications to consider include the CIPM and CIRM from APICS, and the CQA from the ASQC. All professional certifications enhance professionalism, and show a commitment to education and personal growth.
Informal education is also critical. Attend seminars, read books, utilize company training, benchmark, attend lectures, network, subscribe to newsletters and magazines, join professional societies, read the paper, watch the news. We are surrounded by information that will help you in your job. Dive in!
Purchasers are often accused of not being team players, hence they are left off of many teams. As cross functional teams are becoming the norm in business today, access to, and membership in, these teams is critical to professional survival. Purchasers must utilize their skills and contact to enhance teams. A positive outlook and confidence in problem solving and communication will work to your advantage. The buyer is in a key position to facilitate team dynamics. Use this to your advantage.
In baseball, the best fielders charge the ball, they don't wait for the ball to come to them. The same analogy works for today's buyer. Don't wait for all of the opportunities to come to you. Get out from behind your desk and look, for opportunities to contribute and become involved. Explore new ways to do things. Research new suppliers and technologies. Wander into engineering and ask what's up. Dig deeper into problems, and offer solutions. By moving out of your perceived universe, you will offer potentially greater contributions and increase your value.
Leadership exhibited in purchasing reaps many benefits, both personal and professional. Be a leader by taking charge! If you feel that action needs to be taken on an issue, take it. Again, many of your co-workers are unaware of just how great purchasing's contribution can be. Being at the center of the action gives purchasers the opportunity to provide leadership.
Excellent communications, both internal and external, are mandatory for truly successful procurement. Today's buyer needs to be an aggressive communicator, using verbal, written, and multimedia tools to properly manage a global supply base. Communication skills that are needed vary by the situation. However, the buyer who operates in a global arena must understand that the era of the eight hour day has passed. Purchasers must always be "on call" to solve a supply problem. Attitudes that exhibit less than total commitment undermine the importance of the profession.
If the previous seven steps are utilized, the buyer will be able to anticipate what needs to be done to ensure successful purchasing. The common thread to all eight steps is being in the middle of the action. Purchasers have that opportunity every day. They can either shy away, which will accelerate their demise, or seize the opportunity to excel. The opportunities are right in front of all of us.
Buying has become so much more than the processing of requisitions. Forward thinking purchasers are trying to eliminate standard transactional procurement so their is more time to practice effective supply base management. World class supply management demands many "soft skills" , some of which are discussed in this paper. By developing some of these skills, purchasers will be in a stronger position to manage the supply chain.
Corporate life changes day to day. All business people need to adapt, evolve, and respond to these changes. Purchasers are no exception. Those that do not, or will not, change will be among those employees that will quickly become obsolete. The purchasers that expand their horizons, provide direction, and continue to grow will be the leaders of a revitalized and vibrant profession.