The following article was prepared by Mike Taylor, C.P.M., for distribution to ISM affiliate newsletters. February 2007
Whether it’s a two-person lawn mowing business or a multi-national defense contractor, someone manages the supply chain of products and services needed to keep the business running. The extent to which the supply chain can be managed more effectively and efficiently can make or break a business of any size. Natural Selection in the business community happens as the result of losing customers because costs are too high, losing a major liability lawsuit, losing critical sources of supply, missing deadlines and many other reasons which can be caused by Supply Chain mismanagement.
Just like any other business cost, the amount of time, effort and formality spent on Supply Chain personnel and processes depends on the nature and scope of the business. Quick reaction times and low costs are just as important to a very small business as documented processes and audit-proof records are to very large businesses.
I know from first hand experience that some procurement people can be a valuable asset to a company without ever learning about terms and conditions or the UCC. We lived by the principle that by doing our job better, quicker and with fewer problems than the estimator had quoted in the project – we could be a profit center to the manufacturing company. When I moved into government contractor procurement – was I in for a shock. Performance was still important, but the primary emphasize was on having super-duper documentation that could survive a government audit.
Did I, coming from private industry, have a lot to learn? Yes (still do). It's hard to make the transition to a place where documentation rules. Interestingly I know some buyers who learned the business in government contracting and who had a heck of hard a time making the transition to a small manufacturing facility. Why is hard to transition to private business? Because the performance expectations in a one-person department are very different. Here are some ideas:
Life’s lessons that I can attribute to the old codger who took a chance on me and taught me the business:
"Mikey" he said, “Purchasing is a profit center...”; “Make your own decisions, if I’d wanted to buy it I wouldn’t’ have assigned it to you...”, “figure it out...” , “you’re the one who pissed the vendor off – now fix it...”.
I wouldn’t have traded that entry into the profession for anything!
The contrary is also true. I know some old-time and some small-time professionals who just can’t figure out how to please an auditor. They fear documentation like the avian flu and hide behind procedures as a reason for not being effective. Also, for some people, efficient use of modern tools is an elusive goal which dramatically hurts their ability to be of value to a large highly-regulated organization.
My point is, that those people who look down their noses at one side of the profession or the other are letting their noses get in the way of the bigger picture. I know plenty of examples where people who do one job effectively would flounder in the other. Each is just as important to the health of the business.
So what can we do to keep from falling too hard on one side of the fence or the other?? Here are some ideas .
Remember that management has a vested interest in hiring creative, multi-taskers. Also keep in mind retirement isn’t always voluntary.
Read more articles in the Purchasing Toolbox at http://www.mltweb.com/prof/tools.htm and in the BuyTrain news article archive at http://www.mltweb.com/tools/buytrain/index.htm