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What are the 3 biggest challenges faced by supply chain/purchasing professionals today? (Survey Result 10)

Written by: Jon Hansen

Article Overview: There are many factors both internally as well as externally that are affecting supply chain/ procurement practices today. From the growing talent vacuum to the continuing lack of collaboration between Finance, IT and Purchasing relative to corporate initiatives. What in your own experiences and opionions are the top 3 issues that procurement professionals face?

What are the 3 biggest challenges faced by supply chain/purchasing professionals today? (Survey Result 10)

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.

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Article Tags: added value, administrative level, ambitious objectives, antwerp belgium, beneficial impact, best solution, consumer confidence, cost of ownership, faze 2, good friend, high volume, life cycle, procurement department, purchasing departments, purchasing officer, role management, undertone, unilever, visions, volume products



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Re: What is your biggest challenge? Today? - [quote:3ce2ievo](Oh, the state of the human condition! What challenges we create for ourselves. Do the birds of the air toil as we do? Or do they simply revel in the joy of each moment?)[/quote:3ce2ievo] GT - Be like the birds... That's my biggest challenge today.
Re: What Businesses to Bail Out? - That's the tough thing. People are really hanging onto their money right now, in fear that they may lose their job. No one is secure and it's going to be one of our biggest challenges ever to get through this crisis. All the money Obama sank into the system to get things moving and 10 months later we are still losing jobs. There's got to be a better way.
Re: What is your biggest challenge? Today? - My today biggest challenge was to avoid distractions... and i managed.
Finding Good People - From my own experiences and from interviewing some of Canada's fastest growing companies, one of the biggest challenges always seems to be finding good people to hire. What have you guys done to find good people and keep them in your organization?
Survey the Landlord - Terry, my suggestion is simple but powerful - Survey. Survey Landlords and find out what is important to them. By doing this it does two things: 1. You will find out trends/under-operated services that Landlords are currently unsatisfied with = your client will be able to fulfill 2. You are infact Marketing your clients services by doign this because when you are approaching your landlords it not a sales pitch and they have someone to clear their frustrations with. Then when you approach them after a month (when you've put your numbers together and identified services that are most important) you can remind them of the survey and share with them the results. At this point you can end with an offer to use your clients services to manage their property. I use this method with my clients who are looking for new services to develop in thier markets. It's simple but powerful.


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