Geert, Junior Chief Purchasing Officer, Antwerp, Belgium
3 issues is very limiting... so I'll give you an overview of the things I miss to some degree within the SCM profession in general.
1) The lack of thinking about products as solutions instead of just simple products.... too few purchasers question the things they buy. Are the products bought actually the best solution to the problem/need that needs to be addressed? When I review purchasing decisions I often come to the conclusion that the biggest opportunities that are missed are located in this faze.
2) The lack of a total cost of ownership approach (not only within the company but also as a product used by customers). We should actually facilitate "optimised life cycle managed procurement". This in result will have a beneficial impact on consumer confidence and loyalty...
3) The patronizing role management in general takes toward purchasing needs to be addressed. Sometimes the procurement department has only their selves to blame. You need to earn respect through results. It can never be a goal to just survive on a administrative level. You should aim at providing services within your company on the tactical and strategic level. Purchasing departments need vision and need to formulate those visions to management. They need to set daring and ambitious objectives with regard to their field of expertise year in year out. If there is one field in business (except sales) where performance is easily quantifiable it is procurement. A good friend of mine in a senior position at Unilever once told me..... "our profit, on well established high volume products, is for 70% based on the added value created by the procurement department." Saving costs in qualitative ways is easy. Getting management to value your input is the hard thing.
4) A lot of purchasers have a hostile undertone in their communications with their suppliers. I think this is really wrong. If you don’t prepare and pay too much, it’s your own fault. You can’t blame companies for wanting to earn more then average. We purchasers should also be driven to perform better then average. If we loose. We should be a good sport. We should focus more on creating partnerships. Instead of buying just products, we should steer the industry at creating exactly what we need. This is also the fun part... the process of creation over the boundaries of your own company. This is where the magic and true added value for society is created.
5) Purchasers need to accept, more then others, that they are part of a system and can not exist as an Island on their own. They should focus on building bridges. They should facilitate collaboration instead of slowing it down or in some cases making it impossible.
6) Purchasers need to be (just as account managers) extremely diplomatic. They need a thick skin, never take things personal, and try to be empathic whenever possible. But also act firm when needed.
7) Purchasers need to handle with care the responsibility and power accorded to them by management. Power is a tool, not an end in itself. I sometimes hear of situations were purchasers misuse their bargaining power. Very wrong.
8) As the purchasing department is in a way the back end (and front end in sometimes) toward suppliers (customers), they should sense changes in the market space, have a critical view on the core activities within a business, and alarm the company whenever necessary.
9) Purchasers should also act like COO's in a way. They have to take the bull with the horns, every time they see a process that is needlessly complicated and is wasting company resources. They should focus on creating and stimulating an environment in witch organisational efficiency, as a result of critical self evaluation is key. Not a nice to have, but an essential part of what a purchaser/Supply chain manager should be doing.
10) I could go on for some time, but if you want to further discuss this topic I'll be more then willing to do so at a later date.
What are the 3 biggest challenges faced by supply chain/purchasing professionals today? (Survey Result 10) - To learn more about this author, visit Jon Hansen's Website.
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