By Tom DePaoli
Often a purchasing department gets bogged down in bureaucratic work and suffers from constant second guessing and criticism from other departments. The whiplash can be severe and demoralizing. Morale can plummet and purchasing professionals are often forced to defend their work and goals. This is a further time waste and hindrance to their efforts. Constant fire-fighting of crises, real and imagined, contributes to wild goose chases and perpetual department uproar.
Here are some suggestions to revitalize your purchasing department.
Purchasing leadership needs to convince upper management of its strategic value and importance to the organization. In a previous blog post, How to Convince Top Executives of the Value of Purchasing, I noted that one way to sell purchasing’s importance is to empower as many other employees as possible to participate in purchasing especially on cross-functional sourcing teams. Involving as many personnel in constructive purchasing activities educates them on the value and importance of purchasing.
Purchasing as a team needs to totally reject non-value adding bureaucratic work in order to give purchasing professionals the time and the tools to complete more strategic customer work. The focus should be on the voice of the paying customers and the voice of the internal customers. Note that 95% of most process steps are in fact non-value adding and the paying customer has no interest in these valueless steps. Automating most purchasing transactions via software is the most critical tool to free up purchasing professionals to concentrate on strategic work and breakthroughs.
Each purchasing professional should improve their overall knowledge of their key supplier’s industry not just be a narrow expert on a singular particular service or material that the organization uses. A customer is not impressed by an expert steel buyer. They want a total product expert that can discuss all the characteristics of the product with them. The information Based Negotiations approach will help, see the blog post, Information-Based Negotiations: A Different Approach, by using the Porter Five Forces Analysis a professional gains a quick understanding of an industry and the supplier dynamics.
Understanding the entire product interactions between materials and services is another aspect to become an expert on. Working on internal credibility by understanding how the business actually works, what are the keys to business success, and the key KPIs are other avenues to explore. Spending quality time with engineering, customers, and sales, including shadowing them, is a good start to credibility. One of the best ways to learn and develop total product knowledge is to meet with customers and discuss their likes and dislikes about your products or services. This is sort of a disciplined focus group that builds trust with the customer.
Here is a story to illustrate this. When I worked for a packaging equipment manufacturer we sat in with sales when customers were deciding which options they would select for the equipment. We soon realized that the salesmen incentive system encouraged them to load up the customer with as many options as possible, many of which they did not need. We worked with sales to redesign the packaging machine options into groups that better fitted the sophistication and needs of all our levels customers. The customers enjoyed our honesty and we built up lasting relationships with them. Because of this trust, customers worked with purchasing to help determine the spares packages that were appropriate, warranty options, and the machine service level to select.
A purchasing leader needs to develop their teams’ leadership skills. One of the best ways to accomplish this is by delegating to them the leadership of cross-functional sourcing teams. Another way is by appointing team members to the role of main contact to key suppliers similar to a suppliers national account manager. In this position, they are responsible to manage the relationship in addition to all the supply chain details.
Finally, the entire department needs serious training on leadership and soft skills. Assessments of strengths, emotional intelligence and presentation skills should be done on an ongoing basis. One tool that I have used to discover what purchasing professionals are good at, or what makes them stand out, is the Gallup organization's StrengthsQuest. This was discussed in my blog post, Purchasing Professionals Need Teamwork That Builds on Their Strengths, The key point is to give purchasing professionals clear chances to succeed by using their strengths, rather that berate them for their weaknesses.
With these actions purchasing can reinvigorate itself and restore the passion of being the best.
Dr. Tom DePaoli is the Management Program Director at Marian University in Fond du Lac, Wisc., and the Principal (CEO) of which does general business consulting in the supply chain, Lean Six Sigma and human resources areas. Recently he retired from the Navy Reserve after more than 30 years of service. In other civilian careers, he was a supply chain and human resources executive with corporate purchasing turnaround experience and Lean Six Sigma deployments. He is the author of eight books and numerous articles. His Amazon author’s page is https://www.amazon.com/author/tomdepaoli
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