How does Purchasing Management works ?
A huge subject! It must be a significant part of a Purchasing Manager’s workload! Like any manager, there is first and foremost his or her own team, made up differently depending on the size of the company, whether or not operators are decentralised, whether procurement and logistics are integrated into the team, the number of indicators to be monitored, the objectives to be achieved, etc…
But I don’t think that’s all there is to management in purchasing… You have to convince, get buy-in, involve, control and sometimes even reframe… INTERNAL CUSTOMERS! Or prescribers, depending on the vocabulary used.
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Who is the internal customer?
Once again, it all depends on how the company is organised. The more varied their profiles, the greater the levels of responsibility and order fulfilment, the more complicated it becomes.
The internal customer is the one who first expresses the need. He is the user, the one who will also respond to his customers, he has deadlines to meet and a level of production quality to respect. They are also the ones who have to find or invent a technical solution (the famous 5-legged sheep for the day after tomorrow).
Internal customers often have a strong taste for independence… That’s why they generally make demands on the purchasing department that they wouldn’t impose on themselves, and understandably so! There’s a general feeling that you’re never better served than by yourself….
What is your relationship with the purchasing department?
That’s the question, and the importance of working to coordinate between departments, and especially between internal customers and buyers. They rarely have the same reasoning (which often leads to mutual distrust), but they have to achieve the same results: the best product at the best price, with deadlines respected and plan Bs secured.
We mustn’t forget that the internal customer, whether a design office or an operator, is the “expert” and must be considered as such by the buyer. They are the ones who draw up (… or should draw up, but that’s another subject) the specifications or the expression of need, the ones who validate the purchasing volume forecasts. The purchasing department therefore needs to convince them, not confront them, which is why it is important to understand each other’s objectives (which management will, of course, have set out and explained within the company). Working together is the key to success.
The company’s management also has a major responsibility in ensuring that Purchasing and internal customers get on well together. This is also why Purchasing Directors should be part of the COMEX (Executive Committee) in the best of cases. They often fight to be part of it, or at least to take part in it, in order to get the right messages across. It’s also to make it clearer that the company’s results depend on purchasing as much as on the business development department.
Can internal customers be or become buyers?
Of course they can! But many people think so, confusing Purchasing with Approval or thinking that purchasing is just about negotiating 5% of the supplier’s offer. Some buyers come from a technical background (which is the case for me) and this can be seen as an advantage in certain cases, especially when it comes to determining the total cost of ownership (TCO).
With a good digital tool and a validation chain, the internal customer is a supplier for negotiated and contractualised contracts. This is the right level for the best possible responsiveness. You can even involve other departments to monitor quality and control budgets. It’s one of the major tools for the buyer … along with Excel of course!…😉
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Weproc is a SaaS software specialized in digitizing the procurement process of companies. From purchase requests to supplier invoicing, through the validation process, Weproc is designed to simplify the purchase management of SMEs and mid-sized companies by centralizing all purchase-related activities.