SELLING THE PURCHASING FUNCTION

The following outline was developed from a presentation to the District XI Leadership Workshop in Kennewick, WA on July 19, 1997. It includes ideas generated during a brainstorming session in which we discussed purchasing's contributions to the company. The outline and brainstorming results are posted for the benefit of my friends in District XI who participated and all people in the purchasing profession.

OBJECTIVES

Identify the role Purchasing Plays in the organizational structure
Identify contributions to sell the importance of purchasing to management
Review personal contribution strategies
Review NAPM Affiliate contribution strategies.

WHAT DOES SENIOR MANAGEMENT WANT?

Caps Study CEOs'/Presidents' Perceptions and Expectations of the Purchasing Function
Summary at http://www.capsresearch.org/research/focuses/ceos.htm
Don't feel purchasing adds much beyond bottom line
"Purchasing is NOT a major contributor in most business decision making"

ARTICLE. PURCHASING MAGAZINE, MAY 1, 1997

How engineers in the OEM view purchasing pros:

WHAT PURCHASING BRINGS TO THE TABLE:	WHAT PURCHASING COULD DO BETTER
Knowledge of supply/suppliers	Knowledge of suppliers and products
Price/cost knowledge	Technical understanding
Delivery/schedule information	Better communications
Negotiation skills	Monitor supplier performance
Legal/contractual skills

COMPETITON REQUIRES NEW PRIORITIES

World Market competes for company customers
Innovative purchasing solutions compete for purchasing customers
- Purchasing Card programs, Electronic Commerce, Internet Catalogs, Extranet ordering, Purchasing Service Companies, Partnering, Purchasing degree programs
There is no time or money to waste on organizations that don't contribute.
Companies can't be successful without the effective contributions of all of the individuals.
Company can't support any "professional" driftwood.

WHAT CAN I DO TO EARN RESPECT?

Add Value; Add Functionality; Get the job done!
Publish information within your company. Anticipate questions, concerns, discussions about products you are/could be buying, suppliers, lead times, etc. and publish the information before you are asked.
Be Proactive. Anticipate company needs and write orders to solve problems.
Contribute to the bottom line. Make a difference? [Purchasing is a profit center].
Take Responsibility.
Take ownership.
Be effective. Have control of the suppliers, data, reports, and information?
Understand the regulations that affect your industry?
Find current information on the Internet, and distribute to management.
Become the office expert and helper on something useful;
- Using the Internet
- Publication and Presentation layout
- Printing & spreadsheets
- PC s, software
Be professional. [Casual dress day doesn't mean grubby] [Don't "punch out" until the job is done]
Be part of the team.
Bring new ideas to the table?
Understand the company "vision"
See, and help paint the big picture
Share the burden of positive leadership
If senior management is a member of community organization, give them something to take to a meeting that they can be proud of. That is, what impact does your company have on local economy or community?
Be an emissary to community
Attend meetings with other organizations to hear about their needs first hand. Don't wait for them to look for you.
Change happens. Don't fight it, facilitate it.
Make sure everyone understands what purchasing does and how it contributes to the company.

HOW DOES PURCHASING CONTRIBUTE? (Are you doing all you can?)

Advise users and management
Analyze customer contract terms
Assist in new product development
Assure a constant supply of materials
Commodity and industrial review and information
Cost reductions
Cross functional team participant
Educate vendors and internal customers
Ensure legality of business actions related to purchases
Envoy for company social and community policies
Expedite and ensure delivery and contract performance
Financial analysis of suppliers
Interpret contractual regulations
Inventory reduction
Inventory control planning and implementation
Lead project suppliers
Locate sources
Locate new technologies
Locate materials
Maintain supplier relationships through mediation and negotiation
Make/buy decision coordination and alternatives
Manage cash flow to suppliers
Materials availability
Meeting schedules
New product development
Price reductions for components and raw material
Product information
Professional business perspective
Profitability
Promote professional and ethical relationships with suppliers
Quality control and improvement
Services to internal/external customers
Strategic planning information
Strategic planning for bottom line impact
Streamline administrative processes
Supplier Performance monitoring
Supply chain risk management
Supply chain consolidation and standardization
Supply chain cycle time reduction
Traffic and transportation cost control and reduction
Understand regulations that apply to activities (e.g. hazardous waste)
Value engineering contributor
Vendor development
Write binding, legal contracts

IMPLEMENT A PERSONAL PROFESSIONAL DEVELOPMENT PLAN:

I am learning to...
My long-term career goals are...
I plan to cite the following accomplishment in my next performance review or discussion with my manager.
By this time next year, I will be better at:
I am more valuable to my company that a well qualified job candidate because:
I am an active participant in a Professional Association
My participation in NAPM adds value because...

How can the NAPM Affiliate help members be successful?

Make it easy for people to participate
Publish programs, publish membership, invite managers, provide feedback, list of contributions
Proactive. provide ideas, suggestions, improvements, "extra effort"
Provide something members can use to justify the time they spend participating.
Help them sell it to themselves, the company and their family.
List of association education and training programs
Provide a R.O. I. to members
Develop the "professional", not just the "buyer"
Answer the question: What impact has your association made to your members?
Provide members with effective rationale to use when participating in an NAPM function.
Facilitate communication between members and their companies.
Provide extra copies of newsletters and seminar notices so they can be routed in the company.
Provide a "benefits of membership" statement for you local affiliate.
Facilitate communication between members and other members.
Who is the membership network?
What skills and information can be shared among members?
Emphasize what/how people could be using the benefits of membership
Feedback about practices in other countries.
- Yes we know some countries have different ethical standards and that you have to know import rules to buy internationally, but what do the purchasing organizations in other countries do that might be useful here?
How does the purchasing department fit into the Japanese management style?
Provide members information/ articles, news they can use in selling themselves.
Make sure NAPM, C.P.M., A.P.P. are commonly used acronyms
Provide information members can share at community organizations and events.
Publish the list of Purchasing's Contributions (located at: http://www.netcom.com/~taylorml/value.htm)

OUR GOALS:

Be a WORLD CLASS PROFESSIONAL
Be a WORLD CLASS DEPARTMENT
Be a WORLD CLASS ASSOCIATION
Be a WORLD CLASS COMPANY

MLTWEB is assembled and maintained by Michael L. Taylor, C.P.M.

Materials and articles prepared by Mike may be shared for purchasing education provided that this source is cited and no fee is charged. The rights for any other use are withheld.

Copyright; Michael L. Taylor, C.P.M.

Last Updated: 05/21/2008