The seven myths of purchasing and supply

There are many misconceptions about the opportunities available in purchasing and supply. David Williams talks to Brian Ford, Director of Marketing and Communications with the Chartered Institute of Purchasing & Supply about the myths – and the realities If your idea of working as a professional purchasing and supply manager is all about dealing with requisition orders and organising HGV drivers, you should think again. Purchasing professionals now work in all sectors, not only manufacturing, and have become just as important to modern business as marketing experts and accountants. Anyone who decides to join the profession will find themselves at the forefront of modern management practice.

Myth 1

It’s just an administration role – all paperwork and pen-pushing. You draw up requisition orders and keep your eye on the minutiae of contracts, but that’s about it
’This is one of the most commonly held myths about our profession,’ says Brian Ford. ‘Perhaps it was true 30 or 40 years ago, but then this was also true of a lot of careers, which would have involved quite a lot of pen-pushing too. But purchasing has done more than just move with the times; it has also matured as a profession and is now a vital part of modern business.’

What changed the purchasing sector was the adoption of Japanese ‘just-in-time’ practices into the Europe manufacturing sector. From here they moved into retail and they have since spread (and are still spreading) into other sectors.

What ‘just-in-time’ means is that a competitive business tries to avoid having large amounts of money tied up in a warehouse while at the same time making sure that its goods are available exactly when a customer wants to buy them. If an organisation can get this balance right, it will have a huge competitive advantage, but this approach is much harder to manage than the old system, which was really about checking that there was enough in stock for all eventualities and involved a lot of paperwork. Modern purchasing and supply professionals are therefore concerned with managing supplier relationships, not pen-pushing.

Roles in purchasing and supply today include:
• supplier relationship managers
• category managers (who specialise in a particular commodity)
• travel buyers
• business service buyers
• supply chain managers
• procurement performance managers
• procurement managers
• trading managers
• commercial managers
• procurement consultants
• e-procurement managers
• procurement analysts
• contracts managers.

Myth 2

You are never in charge – you are just told to go and buy something and you go and do it
’It follows from the first myth that purchasing and supply managers have to be professionals,’ says Brian Ford. ‘It’s not the kind of job where you can simply be told to buy a widget; organisations gain enormously by using the initiative of their purchasing managers who can identify cost-savings and innovations that simply have not been thought of anywhere else inside the organisation.’

One of the most important aspects of the role is the way that a purchasing manager can bring innovation into a company using his or her knowledge of what suppliers are working on. It is almost as if the purchasing manager is overseeing several research and development (R&D) departments and selecting the best innovations from each department.

Myth 3

It’s all about squeezing your suppliers until their pips squeak
Purchasing is undoubtedly related to achieving cost-savings, and it is true to say that when the economy is in a downturn, businesses will look to purchasing departments to save money. However, this is also true of other departments: senior management will look equally to marketing and sales to increase turnover and to manufacturing to increase efficiency. ‘One important thing that should be remembered is that successful management in this field is all about creating sustainable supply networks,’ adds Brian. ‘Yes, you have to achieve cost savings, but you also have got to keep in business suppliers that you may have nurtured for years. Any supplier going out of business is a personal and professional disaster.’

Myth 4

It’s all about HGV drivers and warehousing
In fact, logistics is rarely the responsibility of the purchasing manager. The supply profession is now split between logistics and purchasing, with drivers and warehouses coming under the brief of logistics managers who have their own professional association, the Institute of Logistics and Transport.

‘This myth does conceal one further myth,’ adds Brian. ‘The reason many people think that purchasing and supply is about manufacturing is because modern purchasing practices were developed by the Japanese car and electronic goods manufacturers. But the profession is no longer mainly about buying components and moving them around. Today our members are just as likely to be involved in purchasing IT systems or business services.’

Myth 5

It’s only men who work in purchasing and supply
’Our members work with sales, with R&D departments, and with key account managers,’ explains Brian. ‘This means that interpersonal skills and the managing of relationships are particularly important. It is just not a macho profession, and we are seeing much more of a 50/50 gender split in terms of new entrants.’

Myth 6

OK, but it is still not at the heart of business practice
This might be the most pernicious myth of them all. Big organisations can have three or four tiers of suppliers, and huge multinational companies in the first world can find themselves linked through the supply network to small owner-managed enterprises in the developing world. How workers are treated there can often be a source of concern to first-world customers, and revelations in this area can have a devastating effect on the integrity of a brand. Purchasing and supply managers are at the forefront of creating policy and standards in the increasingly important area of business ethics. They are therefore at the cutting edge of modern business practice.

Myth 7

There are no qualifications so it can’t really be a serious profession
The Chartered Institute of Purchasing & Supply (CIPS) runs a graduate-level diploma qualification for its members, and there are now a number of postgraduate Master’s level qualifications available. CIPS also runs a number of courses in the essential areas of purchasing, negotiation, relationship management, influencing skills, legal contract management, stores management and operations management.

‘Purchasing has moved with the times, matured as a profession and is now a vital part of modern business’
Brian Ford, Director of Marketing and Communications, the Chartered Institute of Purchasing & Supply