Don't Blame Purchasing! (The Hardest Job in the Enterprise)
Over the last week, I’ve had the opportunity to speak with a number of individuals about how important it is to change people’s view of the procurement function. Up to now, let’s face it, procurement people haven’t always been the most popular folks around the water cooler. But in the last two years, I’ve personally witnessed a change in how people are starting to view the procurement function.
My first clue occurred at a meeting of global category managers for a large global manufacturing company. At the meeting, one of the individuals who had joined a category team was sharing his experience of what it was like to participate on a team, and discussed his initial perceptions and views. He started out by providing a summary of his background working in the plant on an assembly line: “I enjoyed being in operations in transmission assembly , because working in operations, you get to see the result of so many people’s efforts. You see a part going into another part and into a transmission and you are watching the standard work the engineers gave you, and the work purchasing did to give you good suppliers and parts, and the work design engineers to ensure easily manufactured. Turning it into a transmission is an incredibly rewarding experience.”
He went on to note: “But a transmission has 200 part numbers – any one with an issue can stop an assembly line. One supplier can do it, and any change at all is very fragile. It is terrifyingly fragile to create value in the assembly line. And to make each worse, you have to put together a category plan in a situation where every stakeholder has competing interests!. You are being measured on safety, delivery performance, quality, and because you are in purchasing you are also worried about assurance at price, and logistics is worried about delivery . All these interests are competing!
“I went to my first category management meeting, and they had scheduled a full day. My initial reaction was – that this is way too long! But then I saw that there are 16 people and you start to populate a matrix of priorities, and as you are doing it, you identify what is important to you and to everyone else. After we went through this, we had 30 key issues and 16 people, and had to debate setting a priority in each cell. It was terrifying! After awhile, it suddenly came to me: purchasing has the hardest job in the corporation. All of a sudden, I felt bad when I realized how much I had been blaming purchasing for all the problems we had experienced on the line.”
Another conversation occurred with a senior vice president of procurement, head of a large global chemical industry who was visiting the Supply Chain Resource Cooperative offices this week. This gentleman was visiting from Germany, and he and his colleagues from the local facility had come to meet with our team to review a recent project we had completed on “Creating a Public Relationships Campaign for Procurement”. The student project, led by Kate Hamilton, had focused on how important it was to make individuals in other functions aware of the value that procurement can deliver. This individual noted, “I came from Facilities Management, and had alway worked off project plans. I didn’t understand coming into this role how challenging procurement was. When I came in, I suddenly realized the level of impact that procurement has on the organization, but also how much we needed to drive change into the current paradigm of how procurement adds value. So when a senior executive came to me and asked ‘I need your help on some sourcing some chemicals for some new R&D projects’, I responded that “we would be happy to work with your team, but are you really sure you know what you are asking for? Because if we do engage, there are going to be some big changes!”
Happily, this event also turned out well, and the team is now delivering more value, total cost savings, and technology insights than ever before. Although it is a long road ahead, change is coming….I can feel it!