Buyers/Procurment managers
Discussion
Just thinking out loud.
I've been in my current job for 20 years now, firstly in stores then as a buyer and now my official title which i use very loosely as a purchasing manager.
Everything i've done has been passed down or self taught so I have no official way of doing things but I thought I'd ask people who do the same on here a few questions and maybe learn a few tricks from people more experienced and certainly more qualified.
How does your procurement process work at your place of employment?
Do you have your large orders authorised by senior managment?
How much control do you have on your purchasing
How do you organise your day?
Do you use software and if so what?
Anything other pointers greatly appreciated.
Cheers
I've been in my current job for 20 years now, firstly in stores then as a buyer and now my official title which i use very loosely as a purchasing manager.
Everything i've done has been passed down or self taught so I have no official way of doing things but I thought I'd ask people who do the same on here a few questions and maybe learn a few tricks from people more experienced and certainly more qualified.
How does your procurement process work at your place of employment?
Do you have your large orders authorised by senior managment?
How much control do you have on your purchasing
How do you organise your day?
Do you use software and if so what?
Anything other pointers greatly appreciated.
Cheers
I'm in the same boat, although i started as a buyer, then purchasing team leader and now find myself in a general managers position.
I still undertake all of the procurement activities for the company, i just have to cover everything else as well!
It all depends on what the objectives of the company are and whether its manufacturing / finished goods or assemblies etc that you are purchasing for.
Ours is dependent on a small team including the sales (eek) and technical team getting together to outline a need for a product - we then undertake investigations into far eastern suppliers to determine if the product is available at the spec required for the right price for the company.
Supplier competence evaluations and face to face meetings are a necessary evil in my game (electronic security) as some of these guys will be making CCTV one day and toys the next. The need to feel comfortable that they can deliver what you want when you want it, and at the right cost is paramount.
A lot of far eastern supposed suppliers are no more than middle men or trading houses and these have to be weeded out and avoided.
I generally have a remit of £5-10k in my current role with higher amounts having to be signed off by directors, but in my previous roles with more cash rich companies (think fortune 500 top 50's) i could quite happily sign off orders of £100k + on a monthly basis.
I organise my days by fighting the fire that burns the brighest with the greatest immediate need to be extinguished at the moment - to be honest i would prefer to be proactive but due to the nature of our business we have to react to customer demands with expediency.
I still undertake all of the procurement activities for the company, i just have to cover everything else as well!
It all depends on what the objectives of the company are and whether its manufacturing / finished goods or assemblies etc that you are purchasing for.
Ours is dependent on a small team including the sales (eek) and technical team getting together to outline a need for a product - we then undertake investigations into far eastern suppliers to determine if the product is available at the spec required for the right price for the company.
Supplier competence evaluations and face to face meetings are a necessary evil in my game (electronic security) as some of these guys will be making CCTV one day and toys the next. The need to feel comfortable that they can deliver what you want when you want it, and at the right cost is paramount.
A lot of far eastern supposed suppliers are no more than middle men or trading houses and these have to be weeded out and avoided.
I generally have a remit of £5-10k in my current role with higher amounts having to be signed off by directors, but in my previous roles with more cash rich companies (think fortune 500 top 50's) i could quite happily sign off orders of £100k + on a monthly basis.
I organise my days by fighting the fire that burns the brighest with the greatest immediate need to be extinguished at the moment - to be honest i would prefer to be proactive but due to the nature of our business we have to react to customer demands with expediency.
Chief asnd Robstar - No harm at all in what you say..... if you want to learn more "official" / "best practice" then why not look more closely into CIPS.
If you've been doing the job well for many years there may be some direct entry scheme, ifyou're not interested/keen to go down the whole exams route you can join as a "Student" which means you get invites to courses/seminars plus a monthly mag which does have best practice stuff in.
To answer the OPs questions, my thoughts are;
- The "Procurement Process" needs to be relevant to each organisation, as such it needs to be tailored to every company but broadly it should be; Need Identified, Balanced Criteria created, supplier base identified, RFQ issued, suppliers evaluated, Purchase requisition raised, PReq Approved, Purchase order issued, goods delivered, goods inspected supplier paid"
- Approval levels - these need to be defined by the organisation....... for example at one company there was no point giving me a limit of less than £10m as that covered a months order from one supplier! in another it was deemed that £5k was sufficient.... now I see my Co-Directors agreement if I'm spending more than £500.
- Extent of control - Always a massive talking point... the question should be "how large is the gap between what you think you control and what you do control" take a look at the number of suppliers your purchase ledger have set up to get an idea...... for one company I worked for we spent c£750m pa of which 8 suppliers accounted for about £60m of it... yet there were 5000 suppliers on the books. You also need to ask yoursefl how much control do you want to have..... we did do things to reduce the supply base to just 500 but did it over many years and had one hell of a fight on our hands all the way, but we were prepared for the fight and went into battle with a team of 30 against the rest of the company. We fought the mob street by street, house by house, room by room and after about 4 years of guerilla warfare got the number down to just under the 1,000 when we agreed to call a truce.
- Day organisation - really depended on what I wanted to get done...... but for the really big stuff I would block days out and hide.... at the end of the day the easiest option is to "call purchasing" to get them to "sort the supplier" but when they're not around/available the user suddenly finds that they can sort their own issues or even perhaps acknowledge that they'd cocked up and the item isn't as important as they said it was.
- Software - all sorts, SAP, Oracle, in house, bastardised and even just excel. My favourite was SAP as it was so regimented so for control it was great... as I used to say to users; "it's German, the Germans know the alphabet goes; a, b, c, d, e etc etc... if you try to go a, c, d, e it will say verboten... you missed b you vill go back and do it"
Hoep this helps, feel free to ask anything.
If you've been doing the job well for many years there may be some direct entry scheme, ifyou're not interested/keen to go down the whole exams route you can join as a "Student" which means you get invites to courses/seminars plus a monthly mag which does have best practice stuff in.
To answer the OPs questions, my thoughts are;
- The "Procurement Process" needs to be relevant to each organisation, as such it needs to be tailored to every company but broadly it should be; Need Identified, Balanced Criteria created, supplier base identified, RFQ issued, suppliers evaluated, Purchase requisition raised, PReq Approved, Purchase order issued, goods delivered, goods inspected supplier paid"
- Approval levels - these need to be defined by the organisation....... for example at one company there was no point giving me a limit of less than £10m as that covered a months order from one supplier! in another it was deemed that £5k was sufficient.... now I see my Co-Directors agreement if I'm spending more than £500.
- Extent of control - Always a massive talking point... the question should be "how large is the gap between what you think you control and what you do control" take a look at the number of suppliers your purchase ledger have set up to get an idea...... for one company I worked for we spent c£750m pa of which 8 suppliers accounted for about £60m of it... yet there were 5000 suppliers on the books. You also need to ask yoursefl how much control do you want to have..... we did do things to reduce the supply base to just 500 but did it over many years and had one hell of a fight on our hands all the way, but we were prepared for the fight and went into battle with a team of 30 against the rest of the company. We fought the mob street by street, house by house, room by room and after about 4 years of guerilla warfare got the number down to just under the 1,000 when we agreed to call a truce.
- Day organisation - really depended on what I wanted to get done...... but for the really big stuff I would block days out and hide.... at the end of the day the easiest option is to "call purchasing" to get them to "sort the supplier" but when they're not around/available the user suddenly finds that they can sort their own issues or even perhaps acknowledge that they'd cocked up and the item isn't as important as they said it was.
- Software - all sorts, SAP, Oracle, in house, bastardised and even just excel. My favourite was SAP as it was so regimented so for control it was great... as I used to say to users; "it's German, the Germans know the alphabet goes; a, b, c, d, e etc etc... if you try to go a, c, d, e it will say verboten... you missed b you vill go back and do it"
Hoep this helps, feel free to ask anything.
Ok could i ask you what is more important in your business, cost savings or keeping a steady flow of production or both?
I.e. sometimes we can buy something and save a fortune but this will be at the expense of lead times or we for go that ultimate cost saving by going through distribution but we can almost get this within a week.
Getting a balance between cost savings and delivery schedules can be hard especially in what we do.
I.e. sometimes we can buy something and save a fortune but this will be at the expense of lead times or we for go that ultimate cost saving by going through distribution but we can almost get this within a week.
Getting a balance between cost savings and delivery schedules can be hard especially in what we do.
Marcellus
Brilliant post - Thank you.
I have been looking into CIPS for some time now, But I always wanted to see how other buyers went about their day before I decided if its what i want to do forever or have a career change.
I know one buyer who spends 4 months of the year in China and all he seems to do is meet suppliers, His defining career move was learning Chinese (Mandarin) and he is very fluent in it and it has opened all sorts of doors for him.
Brilliant post - Thank you.
I have been looking into CIPS for some time now, But I always wanted to see how other buyers went about their day before I decided if its what i want to do forever or have a career change.
I know one buyer who spends 4 months of the year in China and all he seems to do is meet suppliers, His defining career move was learning Chinese (Mandarin) and he is very fluent in it and it has opened all sorts of doors for him.
CHIEF said:
Marcellus
Brilliant post - Thank you.
I have been looking into CIPS for some time now, But I always wanted to see how other buyers went about their day before I decided if its what i want to do forever or have a career change.
I know one buyer who spends 4 months of the year in China and all he seems to do is meet suppliers, His defining career move was learning Chinese (Mandarin) and he is very fluent in it and it has opened all sorts of doors for him.
CIPS isn't the answer to everything, but if your future is in Purchasing then it does help to have the letters MCIPS after your name.Brilliant post - Thank you.
I have been looking into CIPS for some time now, But I always wanted to see how other buyers went about their day before I decided if its what i want to do forever or have a career change.
I know one buyer who spends 4 months of the year in China and all he seems to do is meet suppliers, His defining career move was learning Chinese (Mandarin) and he is very fluent in it and it has opened all sorts of doors for him.
That said it means absolutely nothing to me now, as I own my own company.... but it probably did help me get here.
I know nothing about you, but going on some massive assumptions on my part (current job for 20 years puts you late 30s/early 40s, possibly left school with A levels, didn't go to university or if you did 20+ years ago) then even if you're thinking fo a career change being able to show prospective employers that you can study and learn so worth taking the risk and offerring a job to... besides your employers might consider co-funding, then even if you're not going for a career change but thinking of a company change CIPS would help.
CHIEF said:
Ok could i ask you what is more important in your business, cost savings or keeping a steady flow of production or both?
I.e. sometimes we can buy something and save a fortune but this will be at the expense of lead times or we for go that ultimate cost saving by going through distribution but we can almost get this within a week.
Getting a balance between cost savings and delivery schedules can be hard especially in what we do.
There's always the triangle between; Cost, Quality and Availability and that's why the criteria need to be "balanced criteria". In drawing these up as a team you must agree on the balance, sometimes these sessions can be quite difficult to manage..... I.e. sometimes we can buy something and save a fortune but this will be at the expense of lead times or we for go that ultimate cost saving by going through distribution but we can almost get this within a week.
Getting a balance between cost savings and delivery schedules can be hard especially in what we do.
The perspectives being;
- Purchasing - Cost, cost, cost
- Technical - quality, quality, quality at any cost
- Supply Chain - Look I don't care how good it is or how much it costs I just need the f
ing thing, yesterday!!At the end of the day;
- Anyone can buy anything cheap, but when will it be delivered and what quality
- Everyone wants an Aston Martin, but reality is you can only afford a Honda Civic
- It's no good getting delivery if production can't run it and consumers don't like the finished goods
Marcellus said:
The perspectives being;
- Purchasing - Cost, cost, cost
- Technical - quality, quality, quality at any cost
- Supply Chain - Look I don't care how good it is or how much it costs I just need the fing thing, yesterday!!
Mate you have hit it on the head there and that is exactly the problems I face.- Purchasing - Cost, cost, cost
- Technical - quality, quality, quality at any cost
- Supply Chain - Look I don't care how good it is or how much it costs I just need the f
ing thing, yesterday!!MD - Constantly on at me to get costs down even though certain factors push prices up (i.e. raw materials) This is the hardest part of my job as he still has too much control in the process, he is very stuck in the dark ages with software and new ways of thinking but he pays the wages and sits in the big chair so I do what I am required to do.
Technical engineers - Gold plated components (a running joke in my firm)
Production - Dont care on cost or quality just want it in yesterday and easy to work with.
It really depends on the industry and what you buy and how you buy it.
I have worked in local government (as a Purchasing assistant) I then worked for a position sensor company, mostly apointing sub cons, then a car manufacturer putting together longterm supply/development contracts, now I work as a Purchasing Manager at a sub con (well for 1 more week) where I control logistics and Purchasing.
I am currently trying to get into facilities purchasing, which again is complex supply agreements with SLA's KPI's etc the interesting stuff for me at least
If you are doing the day to day buying. Need something - buy it. Then CIP's is of relatively little use.
If you are appointing subcon's and managing complex supply agreements then CIP's is very very useful.
The day to day placing of orders, chasing products is not really adding value in my opinion. If you can do this in a strategic way then you are adding value and CIP's becomes more useful, and conversley CIP's will help you do this.
To answer your other question.
Cost, quality and delivery should hold equal value in every company. Again it depends what you are sourcing.
If you are buying component parts, then the market will dictate the cost, you just need to make sure you are not paying too much, and the supplier you are dealing with can actually deliver on time to the 'required' quality. (This is very important, no point putting a Meridian hi fi in a mini!)
Once you get into appointing sub cons then it gets much more complex. But the ability to cut cost, drive up quality and improve delivery is greatly improved and CIP's training comes into its own.
I have worked in local government (as a Purchasing assistant) I then worked for a position sensor company, mostly apointing sub cons, then a car manufacturer putting together longterm supply/development contracts, now I work as a Purchasing Manager at a sub con (well for 1 more week) where I control logistics and Purchasing.
I am currently trying to get into facilities purchasing, which again is complex supply agreements with SLA's KPI's etc the interesting stuff for me at least
If you are doing the day to day buying. Need something - buy it. Then CIP's is of relatively little use.
If you are appointing subcon's and managing complex supply agreements then CIP's is very very useful.
The day to day placing of orders, chasing products is not really adding value in my opinion. If you can do this in a strategic way then you are adding value and CIP's becomes more useful, and conversley CIP's will help you do this.
To answer your other question.
Cost, quality and delivery should hold equal value in every company. Again it depends what you are sourcing.
If you are buying component parts, then the market will dictate the cost, you just need to make sure you are not paying too much, and the supplier you are dealing with can actually deliver on time to the 'required' quality. (This is very important, no point putting a Meridian hi fi in a mini!)
Once you get into appointing sub cons then it gets much more complex. But the ability to cut cost, drive up quality and improve delivery is greatly improved and CIP's training comes into its own.
Edited by Bertrum on Tuesday 4th December 15:40
and to a degree he's right.... purchasings role is to "control costs so that the rest of the business can get on and do what they need to do whilst being able to understand the financial implications of doing it"
Your MD is doing his role (ie increasing Profits) and sees reducing cost as the easiest way to do it, but there is only so much cost you can reduce before quality takes a real dive, either of materials produced or delivery.
It sounds to me as though you need to step back from the coal face and review your companies spend into type (not paper, ink etc) but "transactional" "Stragetic" "critical" I'm sure there's a 4th but can think of it at the moment.... then define how you're going to "manage" each group.
It might mean that you "let go" of some materials.. I mean do you really care where Mavis from Accounts orders photocopy paper this week? No.....so long as she pays for it on the company Visa... the favourite past time in the UK? Not football, not fishing, not rugby but Buying...... so let the Mavis' of this World do what they like doing the most retail therapy you'd be surprised at how well they do it.. so long as the FULL ACQUISITION COST is the lowest then it's no skin off your nose..... This means that you can give yourself the space / time to understand what these "Gold Plated Components" really are, what they mean to your organisation in terms of finished product, what they mean to your customers, why tehncial love them so much and what makes them run well..... and then onto the supplier market then who makes them, what drives their costs.
Once you fully udnerstand both sides of the coin then you can work out how best to manage it and start about getting everyone (including your MDs) to buy in to your strategy...... then you can implement your strategy.
Your MD is doing his role (ie increasing Profits) and sees reducing cost as the easiest way to do it, but there is only so much cost you can reduce before quality takes a real dive, either of materials produced or delivery.
It sounds to me as though you need to step back from the coal face and review your companies spend into type (not paper, ink etc) but "transactional" "Stragetic" "critical" I'm sure there's a 4th but can think of it at the moment.... then define how you're going to "manage" each group.
It might mean that you "let go" of some materials.. I mean do you really care where Mavis from Accounts orders photocopy paper this week? No.....so long as she pays for it on the company Visa... the favourite past time in the UK? Not football, not fishing, not rugby but Buying...... so let the Mavis' of this World do what they like doing the most retail therapy you'd be surprised at how well they do it.. so long as the FULL ACQUISITION COST is the lowest then it's no skin off your nose..... This means that you can give yourself the space / time to understand what these "Gold Plated Components" really are, what they mean to your organisation in terms of finished product, what they mean to your customers, why tehncial love them so much and what makes them run well..... and then onto the supplier market then who makes them, what drives their costs.
Once you fully udnerstand both sides of the coin then you can work out how best to manage it and start about getting everyone (including your MDs) to buy in to your strategy...... then you can implement your strategy.
Edited by Marcellus on Tuesday 4th December 15:55
I've just applied to do my level 5 CIPS minus exemptions. This seems to be the most effective way to get a recognised accreditation.
I've been looking to take the next step in materials management, 70-80% of the jobs I have seen advertised look for CIPS, or MCIPS. Having read the course guides & they look pretty inspiring. I'm looking forward to getting stuck in.
Do you employ S & OP principles?
I've been looking to take the next step in materials management, 70-80% of the jobs I have seen advertised look for CIPS, or MCIPS. Having read the course guides & they look pretty inspiring. I'm looking forward to getting stuck in.
Do you employ S & OP principles?
VidalBaboon said:
Do you employ S & OP principles?
Most organisations employ some form of it.I worked for one manufacturer who made one the next 7days exactly what they'd sold in the previous 7. The cost of low volume runs and high number of changeovers was balanced by the reduction in stock levels but needs massive support from suppliers.
Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff