It’s actually sitting right under our nose . . . . . . but we manage to snub our nose at this function time and time again. It’s Purchasing – not Strategic Sourcing, not Category Management, not Global Sourcing, not the forever –exalted Supply Chain (and it’s ever changing scope /definition) but simply Purchasing! And I say Purchasing with all the professional respect this group deserves BUT seldom receives.
We, as “buying” professionals, have historically treated Purchasing as the “ugly stepsister” (no offense to stepsisters by the way). This group is often referred to as tactical, non-value added, transactional, able-to-be automated, outsourced or even eliminated. Here is how we think about the Purchasing function:
In a nutshell, Purchasing is the “Glue” that holds the buying function together. They play liaison to internal business partners, suppliers and customers and are the face of whatever you call your “Procurement” function. When Purchasing works, everyone up and down the supply chain is happy:
- Sales – customer order are being filled on time and at the agreed upon margin
- Sourcing – the internal organization is buying off of contracts
- Manufacturing – materials are where they need to be, when they need to be there
- Plants – inventory in being maintained at optimal levels
- Suppliers – purchase orders are being issued and invoices are being paid
- Internal Business partners – requisitions are being processes and filled
- Customers – orders are being filled under the agreed upon time frame
- Everyone – issues are being resolved in a timely fashion
When Purchasing does NOT work, then the entire Procurement function falls apart. I wish I had a dime for every time I hear a Sourcing organizations complain about having too much tactical work and not having the time to focus on Strategic Sourcing. This is because not enough attention is being paid to the operational excellence that is required of the Purchasing function. By the way, operational excellence is not about having everything automated because that is impossible. What it is about is having the right combination of adoptable processes, technology and skilled people to get the job done. In addition, it is also about strong customer service, attention to detail and the ability to lead change.
By the way, the best Strategic Sourcing contract in the world is meaningless unless it is successfully executed and adopted – and THAT is Purchasing’s job! Sourcing professionals, take a good look at your Strategic Sourcing process (7 steps, 9 steps, 10 steps, whatever . . .). It cannot be executed without the strong involvement and support of the Purchasing function. Best of luck getting accurate spend data, supplier information or even business requirements without Purchasing. In addition, if the operational execution is failing, your internal business partners are not going to be too willing to let you lead a Sourcing team for one of their categories – they will kindly suggest that you look elsewhere.
So the next time you think of the Purchasing function imagine a model airplane. If all the parts are properly in place and glued together, it has a pretty good chance of a successful flight. But if those same parts are not glued together, it will fall apart the minute it tries to launch. Thanks to the thousands of Purchasing professionals that provide the “glue” which allows the rest of the “supply chain” function to soar . . . . .
Join in the conversation and let us know what you think . . . . . . .