Chemicals buyers: Talk like a chemist
Technical training isn't always a must for purchasing staff, but it can give buyers an edge both internally and in managing suppliers.
By Gordon Graff -- Purchasing, 4/5/2007 6:00:00 AM
Perhaps more than most, the chemical process industry has its share of technical jargon and complicated materials science involved. Buyers at chemical makers and at firms buying chemicals are learning that "talking the talk" may not be a prerequisite for a purchasing job, but it's certainly an advantage and can be the key to procurement's earlier involvement in the product development cycle.
For firms that sell chemical intermediates to downstream industrial customers, familiarity with the ins and outs of molecules and formulas is so important that new hires in purchasing may be required to possess a technical degree. But for consumer product companies, a technical background is seen as desirable but not necessary for procurement professionals, as long as they can pick up the scientific lingo on the job.
At Eastman Chemical, nearly all the purchasing managers have degrees in chemistry, chemical engineering or mechanical engineering, says Vaughn McCoy, senior global procurement manager at the Kingsport, Tenn. company. The few newly hired procurement personnel who don't have a technical background, he says, "have to come up to speed in this area very quickly."
As McCoy sees it, technical knowledge is needed for Eastman's buyers to understand the company's strategic position vis-à-vis its technology-based competitors all over the world. Knowing what goes into a product, where and at what price the required ingredient can be sourced, and the different ways a product can be made, he says, "helps us to recognize where we have leverage over other participants in the market, and why our position relative to them is strong or weak." Such an understanding, he adds, can influence decisions about which production processes to use, and the marketing and pricing of new or existing products.
Bottom line benefits
Knowledge of chemistry and other technical aspects of the business "is a real benefit" for purchasers, says Scott Workman, director of global chemical purchases at Procter & Gamble in Cincinnati. Such knowledge, he adds, "has helped us get new products to market faster by identifying alternative sourcing strategies."
For example, Workman says P&G's purchasing organization has identified locally available materials which have accelerated product development. It has also recommended formulation modifications which help R&D save money for both the company and the end customer.
Formal training as a chemist or engineer is not required for every chemical purchasing function at P&G, notes Workman. "Generally, the key aspects of a technology can be learned," he says. But for highly complex projects with a heavy content of chemical terminology, P&G prefers to use purchasers with strong technical backgrounds. Some of them, says Workman, are transfers from the company's R&D or engineering organizations.
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But even for the most high-tech organizations, the purchasing staff needn't be scientific whizzes, as long as the required information is close at hand. At the Bergquist Co., a manufacturer of thermally conductive and electrical insulating materials, technical training is "helpful, but not overly important" for purchasing people, says Ben Shepherd, a buyer at the Chanhassen, Minn. firm. He says the company's engineers are always available for informal talks on "what characteristics of our materials are important and why."
At other chemical firms, technological briefings are more structured. Eastman, for instance, has in-house courses that give nontechnical employees an overview of what chemistry the company practices and what raw materials are used to manufacture key products. The firm may encourage selected employees to enroll in outside training sessions offered by professional organizations, such as the American Chemical Society (ACS), which has "a virtual campus" of online training sessions, says McCoy, targeted at "people who want to participate in the chemical industry but don't have a strong chemistry background."
P&G offers formal training opportunities for its purchasing staff in a few chemical areas, says Workman. But much of the training takes place on the job, he stresses. Typically, he says, someone newly hired for a purchasing position is briefed on the related technologies by his or her predecessor in the job. Other input comes from ongoing discussions between key technical leaders of projects and a cross-section of P&G's procurement staff. These meetings, says Workman, typically cover such subjects as current and future business needs, formulation trends and marketplace trends.
Bridging the gap
Of course, getting purchasing people to speak the language of technologists only pays dividends if the scientists and engineers at chemical companies understand purchasing and its role in the success of their projects. Bridging the divide between these two cultures has been an ongoing enterprise within the chemical industry.
Over the past two years, says Shepard, purchasing at Bergquist has become much more involved with R&D, whereas the two functions used to operate more or less independently. "Purchasing is seen as an important player in the development of new and existing products," he says, adding that talking the same language has accelerated that process.
At P&G, purchasing gets involved with R&D and product development projects at a very early stage. Sending in chemically savvy procurement staffers early in the game, he notes, ensures that "the commercial perspective is incorporated in existing and future formulations, and key market trends are understood and communicated to meet our business needs." This practice is a big contrast from years ago when P&G's purchasing group was often asked to source a newly developed formulation "thrown over the wall" by R&D, with no prior input from purchasing.
Getting a discovery at Eastman green-lighted for possible commercial development requires that it go through a stage-gate review process, says McCoy. One of the early gates is economic feasibility, including a range of purchasing and procurement checks and balances.
Chemists are encouraged to look into possibilities for materials required if their discoveries went commercial, using databases of chemical producers.
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