In part one of this series, I discussed certain challenges that many Procurement Professionals are currently facing. However, I did not touch upon what may be the most difficult aspect of the Purchasing world – the global marketplace.

The global marketplace and its increasing complexity have made Procurement more reliant on an escalating base of knowledge. With less time and resources to carry out their responsibilities, many Purchasing Managers are also expected to absorb new information about products and marketplaces. Sales teams are generally much better trained in their products and marketplaces than the Purchasing Managers they are selling to. After all, these sales teams are focused on a single product and single market while Purchasing Professionals need to concentrate on several products and several markets.

Another burden leading to more decisions and headaches for Purchasing Managers is the number of purchasing options available today. Many additional considerations must be taken into account. Examples include green packaging, minority suppliers, low-cost countries and rapidly shifting technologies.

As was discussed by the doctor in the blog post “Spend Matters on SCM: If The Prophet is Right ...,” it is essential to not just select the supplier who offers the lowest price available. Some suppliers are merely concerned with the rate at which they produce goods and the amount of orders they take in and nothing else. Sometimes, a slightly higher price right around the corner will benefit your company in the long run more than a lower price overseas will. This usually rings true with most goods. However, in order to fill a large order, only certain suppliers have the capacity to do so and choosing a supplier overseas may be the only option. Also, some companies who outsource their operations have considered moving production closer to end markets. Global energy rates and some raw materials pricing have fluctuated recently and must be monitored very closely.

Purchasing Managers, depending on where their suppliers are located, may be expected to interact with those located in different countries and different time zones, communicating in different languages and possessing very different cultures. The relationship between a buyer and a supplier is likely to suffer if a supplier’s country’s culture is overlooked and vice versa.

Purchasing Departments are also being asked to provide supervision in spending areas previously outside their purview. Some of the responsibilities that were once delegated to IT, marketing, HR, and finance departments are now burdens on Purchasing.

When under attack by this kind of dynamic environment and accelerating expectations from within our own organizations, it is understandable that many Purchasing Professionals default to traditional defensive tactics. This series will continue with the discussion of these reasonable reactions.
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Kathleen Jordan

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