| Purchasing Managers, purchasing agents and buyers | | | | promotion. We can send him to a seminar on Time |
| are the life support system of your supply chain. I | | | | Management."Some of you readers may recognize |
| often use the phrase in leadership training; "You're | | | | that conversation however many may not recognize |
| only as good as the people you surround yourself | | | | the fallacies that lie within it. In wholesale distribution, |
| with." That phrase also applies to one of the most | | | | it seems that the primary prerequisite for becoming a |
| critical functions in wholesale distribution, the | | | | Purchasing Manager is being a buyer for the company |
| Purchasing Manager. So what does being the life | | | | and having long tenure... Promoting our senior buyer |
| support systems to supply chain management mean? | | | | to Purchasing Manager simply due to how long they |
| It means purchasing is the center of the universe, | | | | have been with the company is a common mistake. |
| the equator, the fulcrum when it comes to meeting | | | | This misconception is often based on the lack of |
| customer demands. This is a common fact. We all | | | | understanding about the critical nature of the position |
| know it. Most of us say it and yet few of us really | | | | and how it should contribute to the overall success |
| understand it. Even the US Department of Labor | | | | of the organization.Different Skill SetsIt is an |
| Bureau of Statistics supports it with reams of data | | | | undisputable fact that different skill sets are required |
| on purchasing. However, the more important, often | | | | to become a successful Purchasing Manager as |
| overlooked, misunderstood and underutilized concept | | | | compared to being a successful buyer. Purchasing is a |
| is that Purchasing Managers in our industry are really | | | | profession that requires professionals. Managing a |
| the "Tendons and Muscles" that enhance profitability | | | | group of professionals with the type of personalities |
| within the supply chain itself.Most of us "Talk the | | | | required to succeed sandwiched between the needs |
| Talk" and can quote supply chain gospel. In fact, | | | | of the sales force, the needs of the vendor partners |
| deep down we really do believe that profitability in | | | | and the obligation to be cost effective, competitive |
| the industry is driven by the supply side of the | | | | in the market place and maximize growth and |
| equation. Yet, in reality, we may not really | | | | profitability is not an ordinary challenge. Yet, in my |
| understand the true value, the contributions, the skill | | | | humble opinion, it is probably one of the most |
| set required for success and how to recognize or | | | | important management positions you can hold in a |
| leverage talent within our own organization for this | | | | company. Purchasing Management holds the key to |
| critical piece of our overall success formula.Supply | | | | meeting company objectives. Effective Purchasing |
| Chain Management (SCM)Understanding SCM is basic | | | | Management builds the platform for success.Don't |
| to understanding the necessary purchasing culture | | | | cringe; Purchasing Managers need to have a sales |
| required to leverage our ability to maximize profitable | | | | personality before they can really understand the |
| growth. It begins with understanding your markets, | | | | science of selling in the wholesale distribution industry. |
| your customer base and the future of the industry. | | | | This is a prerequisite to building an effective, |
| It is critical that we understand SCM and how to | | | | supportive purchasing organization that develops |
| create an effective purchasing culture that supports | | | | policy and procedure, creates a cost effective |
| company strategic initiatives. This obviously includes | | | | process, negotiates beyond the purchase price, |
| maximizing profitable growth while maintaining world | | | | develops a staff that understands the necessity of |
| class service and customer satisfaction.Keep in mind | | | | relationship equity with the internal sales force and |
| the fact that the supply chain will exist whether or | | | | embraces the concept of purchasing strategies that |
| not we have a competent, Superstar Purchasing | | | | are in alignment with company strategy. This sales |
| Manager running the buy side of our profitability | | | | DNA will come in handy for the development of true |
| equation. (E-mail for a copy of the article "Margin | | | | partnerships with vendors and gain the respect of |
| Management--Using the Supplier Profitability Ratio") | | | | the company's sales force.Experience in the industry |
| There are a number of academic definitions of SCM | | | | is critical and a college education is a foundation to |
| published today for reference. However, I believe the | | | | build upon. The building blocks should include:- |
| definition can be stated in these terms:"Supply Chain | | | | Leadership Skill Development |
| Management is the coordination of partnerships | | | | - Mentoring & Coaching Skills |
| between the manufacturer, importer, distributor and | | | | - Sales Effectiveness Understanding |
| customer that results in maximizing growth, | | | | - Purchasing Certifications (CPM, APP, CPP etc) |
| profitability and customer satisfaction."How Do We | | | | - Organizational Skills |
| Create the Successful Purchasing Culture?The | | | | - Scenario Planning |
| Purchasing Manager must become the Driving Force. | | | | - Strategic Thinking Skills |
| Sometimes the simplicity of the answer lies within the | | | | - Time Management |
| complexity of the question. Start by asking the | | | | - Operational Analytical SkillsSuper Star |
| following questions:1. How was the Purchasing | | | | Characteristics- Highly Self Motivated |
| Manager selected? | | | | - Optimistic |
| 2. What criteria were used in the selection process? | | | | - Excellent Leadership Skills |
| 3. What kind of qualifications beyond seniority was | | | | - Skilled at Coaching & Mentoring |
| brought to the table? | | | | - Calculated Risk Taker |
| 4. What kind of training did the Purchasing Manager | | | | - Listens Well --- 80% of the Time |
| receive after being promoted? | | | | - Plans Well |
| 5. Does training include leadership skill development, | | | | - Ability to Think Outside the Box Because They |
| coaching, mentoring, negotiations, sales effectiveness | | | | Know What Goes on Inside the Box |
| and team building?Keep in mind that the purchasing | | | | - Excellent Communicator |
| environment at many companies is strictly | | | | - Inspires Excellence in Others |
| determined by size and revenue stream of the | | | | - Strong Social and Interpersonal Skills |
| organization. In larger organizations there is a | | | | - Commands a Presence |
| distinction between the duties of a Purchasing | | | | - Honesty |
| Manager, a Buyer and a Purchasing Agent. And in | | | | - Integrity |
| some cases we just employ order placers with little | | | | - Embraces Accountability for Self and Purchasing |
| or no responsibility for growth and | | | | PersonnelStop and ThinkWhen the time comes for |
| profitability.Purchasing agents and buyers often focus | | | | your company to create the position of Purchasing |
| on routine tasks and they may specialize in particular | | | | Manager or perhaps you realize it is time to redefine |
| product lines or other groups of related commodities. | | | | what purchasing management is all about --- Stop and |
| The Purchasing Manager needs to focus on the | | | | Think; or, as Lieutenant General Russell Honore so |
| strategic side of the business, tracking market | | | | eloquently stated during the Katrina crisis, "Don't Get |
| trends, customer preferences, price trends, cost | | | | Stuck on Stupid". Think about the real value |
| effectiveness and managing the supply chain. This | | | | Purchasing Management should bring to the company. |
| includes evaluating and qualifying vendor partners, | | | | Think about leverage, profit opportunities, |
| improved negotiations and the support of | | | | merchandising and product creativity. Think about, |
| merchandising strategies. Critically important to | | | | cost effectiveness, relationship equities and most |
| creating a successful purchasing culture is their ability | | | | importantly, think about the individual requirements |
| to coach, mentor and train their buyers on creating | | | | necessary to maximize success. Purchasing |
| profitability, maximizing customer service and building | | | | Management should focus on maximizing profitable |
| relationship equity with their own sales force.The | | | | growth. We all look at sales first when it comes to |
| Purchasing Management SuperstarFinding the right | | | | growth and profitability. Don't overlook the ability and |
| person to fill the critically important role of Purchasing | | | | responsibility to contribute to the primary reason we |
| Manager can become quite a challenge. Often times | | | | are all in the business. Remember, Purchasing |
| there is a tendency to simply rely on tenure, product | | | | Management must become the muscles and the |
| experience and the compassionate, often misguided | | | | tendons that maximize profitable growth. Dr. Rick |
| feelings of employee entitlement.The Owner -----"We | | | | Johnson () is the founder of CEO Strategist LLC. an |
| have grown to the point that Purchasing | | | | experienced based firm specializing in leadership and |
| Management needs to become a strategic initiative. | | | | the creation of competitive advantage in wholesale |
| Let's promote Old Joe, he's been with us for twenty | | | | distribution. CEO Strategist LLC. works in an advisory |
| two years now and has been handling the | | | | capacity with distributor executives in board |
| commodity side of our business for the past fifteen | | | | representation, executive coaching, team coaching |
| years."The VP of Sales ---- "But Joe doesn't have | | | | and education and training to make the changes |
| any formal management training and some of our | | | | necessary to create or maintain competitive |
| sales people think he's a real pain! He's doesn't | | | | advantage. You can contact them by calling |
| understand cost effectiveness and lacks creativity. | | | | 352-750-0868, or visit for more information. CEO |
| Remember the major problem we had with our | | | | Strategist - experts in Strategic Leadership in |
| number one supplier."The Owner --- "Hey, he's been | | | | Wholesale Distribution. |
| with me for twenty two years. He deserves a | | | | |