How buyers are changing
Buyers' dollar volume responsibility has doubled in the last six years. Plus they are more technical and highly educated.
By Jim Morgan -- Purchasing, 8/14/2003 2:00:00 AM
Today's purchasing professional is a little older, has been on the job slightly longer, and is responsible for spending a lot more dollars than a comparable buying pro of 10 years ago.
Today's purchasing professional is much more likely to be a woman than 10 years ago—or even five years ago. He/she is more likely to have chosen purchasing as a career than in the past. His/her dollar volume responsibility is twice as high as it was in 1997 and three times higher than in 1992.
Paperwork and transaction processing continues to be the bane of many of these procurement professionals—despite quantum improvements being made in automating the buying process. He or she is negotiating more long-term agreements with selected suppliers.
Looking out on a global market scape, today's purchasing professional is negotiating outsourcing agreements with suppliers around the world. And a vast majority of these buying executives continue to pare away at costs and the size of their supply bases.
These are some of the findings of Purchasing magazine's latest survey of procurement officers and supply chain executives. A close examination of this latest picture of the purchasing executive shows a pro who regularly handles huge sums of money, takes part in corporate-wide profitability decisions, is responsible for performance of a number of nonpurchasing functions, works closely with top management, and is constantly on the lookout for new approaches and techniques to cut costs and improve supply chain efficiency.
What follows is a best effort summary and anatomy of the purchasing professional in 2003.
Personal Background
GENDER
Ten years ago men dominated the purchasing profession—holding down 82% of all the jobs. Today male dominance is still considerable, but falling. Just over 68% of the jobs in purchasing are now held by men.
AGE
Ten years ago (1992-93) the average age of a purchasing executive was 44.7 years. Today the average age of the purchasing executive is 46.1 years.
EDUCATION
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Today 67.4% of all purchasing executives boast a four year college degree. This compares with 61.2% in 1992%. In addition, nearly 13% of all purchasing execs are working for degrees or advanced degrees.
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Nearly 11% of men and 15% of women are working on degrees.
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Business is the degree of preference with 61% of all degrees held by purchasing executives. Liberal arts degrees are in second place with 17%, followed by science/engineering (15%) and other (mostly assorted technical specialties) at 5%.
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Slightly more than 21% of our respondents hold advanced degrees
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Almost 60% of the advanced degrees are MBAs.
PROFESSIONAL CERTIFICATION
Certification has grown slowly since it came on the scene in 1987. Today 21% of purchasing execs polled hold either C.P.M. or C.P.I.M. (American Inventory Control Society) certification.
ON THE JOB
The average respondent to this survey has been in purchasing 9.8 Years.
Professional Responsibility
PROCUREMENT CARDS
Does your company's purchasing department use corporate procurement cards? Statistics in this area have been relatively stable for the past five years:
YES 36%
NO 64%
NONPURCHASING EXPERIENCE
In addition to deep reserves of purchasing experience, a growing number of purchasing pros have been boosting their experience in nonpurchasing functions. Here's a look at the most frequently mentioned areas where purchasing professionals say they have job experience:
| *Includes information technology, hazmat control, and human relations |
|
| Engineering | 31% |
| Production | 55% |
| Inventory | 63% |
| Marketing | 20% |
| Sales | 10% |
| Accounting/finance | 15% |
| Quality | 42% |
| Other* | 11% |
REPORTING STRUCTURES
What is the title to which the head of purchasing reports?
| President/CEO | 35% |
| Operations manager | 29% |
| Manufacturing manager/VP | 15% |
| Materials manager | 9% |
| Chief financial officer | 6% |
| Other | 6% |
DOLLAR VALUE OF PURCHASES
What is the total value of the purchases the individual purchasing pro controls/supervises? Answers to this question vary all over the lot—from less than $1 million to $526 million. The average purchasing responsibility is $31.3 million. In 1992 it was a little more than $11 million.
INVENTORY RESPONSIBILITY
Are purchasing executives responsible for maintaining inventory levels?
YES 81%
NO 19%
More than 81% of purchasing professionals say they are responsible for maintaining inventory levels. This is up from 77% five years ago. Inventory is a shared responsibility for 40% of the respondents—mainly with a sales manager or plant manager. And for 37% of those purchasing officers with inventory responsibility, it's an unshared responsibility.
Sourcing Strategy
LONG-TERM AGREEMENTS
What percentage of your purchases are under long-term agreement?
| In dollars | 47.5% |
| In number of items | 34.4% |
CONTRACT BUYING
How does contract buying today compare with five years ago?
UP 67%
DOWN 6%
NO CHANGE 27%
SUPPLIER CONSOLIDATION
Are procurement managers taking steps to consolidate purchases with fewer suppliers?
YES 87%
NO 13%
SOURCES
Do purchasing executives generally prefer to have more than one source for a given item?
YES 93%
NO 7%
GLOBAL BUYING
Do you buy globally?
YES 81%
NO 19%
In the past several years the percentage of total imports has increased by 46.9%. The types of products and materials most often cited as being purchased from foreign suppliers include chemicals, silicon, steel, paper, bearings, castings, springs, stampings, machined parts and electro-mechanical components.
SUPPLIER MEASUREMENT
Fifty six percent of respondents say they have systems for rating supplier performance. Of the companies with performance measurement systems, 32% are formal systems. The items most regularly measured in such measurement systems:
| Quality | 42% |
| Delivery | 38% |
| Technical service | 20% |
| Price | 37% |
INFORMATION
Information systems used in purchasing operations generally fall into one of three categories:
Integrated with major internal corporate systems and systems of external suppliers 12%
Integrated with major internal corporate systems 60%
Standalone system sharing information within the purchasing organization 38%
JUST-IN-TIME
Are you involved with just-in-time management? This figure has been relatively stable for the past 20 years.
YES 55%
NO 45%
Purchasing's Role
PRODUCT DEVELOPMENT
Are you involved in advanced product development teams?
YES 58%
NO 42%
Among those purchasing executives involved in product development a rough estimate of time devoted to these activities was 14%. Purchasing participants listed major responsibilities to the team as purchasing representative and contact coordinator, product quality assurance, and sourcing expertise.
SUPPLIER SALESPEOPLE
The typical purchasing executive meets with an average of 3.1 sales representatives per week. This is down from an average of six calls per week five years ago.
OTHER FUNCTIONS
Purchasing officers routinely have contact with other functions in their companies. Here's a look at how often they meet and with whom they meet:
| Daily | Weekly | Monthly | Never | |
| Top mgmt. | 31 | 29 | 25 | 15 |
| Design | 28 | 35 | 20 | 17 |
| Production | 55 | 31 | 9 | 5 |
| Maintenance | 31 | 25 | 12 | 32 |
| Marketing | 15 | 24 | 19 | 42 |
| Finance/accounting | 29 | 30 | 24 | 9 |
INCREASING ROLE
A total of 56.2% of respondents report taking on new responsibilities or increasing roles in recent years. Some of the most significant of these new areas of responsibilities and the part played by purchasing:
| AREA | ROLE |
| New product design | Strategy compliance |
| Logistics | Restructuring |
| Reverse auctions | Supervisor |
| Outsourcing | Project manager |
| IT | Outsourcing |
| Finance | Cost reduction |
| Design | Early supplier involvement |
| Contract labor | Cost reduction |
| Inventory | Cost reduction |
TRAVEL
How much traveling does the average purchasing pro do?
| Average number of business trips a year | 5.0 |
| Average travel miles per year | 7.1K |
| Average days per trip | 2.5 |
| Purpose of trips in U.S. and abroad | |
| Investigate supplier facilities | 55.6% |
| Trade shows/seminars | 11.1% |
| Negotiate with suppliers | 44.4% |
| Internal corporate visits | 38.8% |
DOWNSIZING
Purchasing departments across the land have experienced serious downsizing efforts in the past two years (82.1%). Much of the downsizing can be traced to the introduction of serious e-sourcing tools in purchasing. Also playing a major role are the introduction of supply chain management techniques to purchasing organizations and increased attention to staffing structures. Intensity of downsizing:
| Radical | 33.3% |
| Moderate | 52.4% |
| Insignificant | 14.3% |
Job Satisfaction & Career
The final five questions in our survey are really too personal to be treated as objectively as those up to here. Instead of strictly tracking data, these last five questions deal with such things as job satisfaction, problem solving, improving the job, career goals and long term job appeal.
SATISFACTION
What parts of the purchasing job give you the most satisfaction?
A large plurality of respondents (31%) feel as Ralph Richardson, manager of purchasing and stores at EPB, Chattanooga, does that there is great satisfaction in "negotiating long-term deals with suppliers" and potential suppliers. There's a real sense of accomplishment, says Jeff Carter,senior buyer at Dannaher Powell Solutions, Richmond, Va., in "negotiating the right price for my company" and then being able to exceed delivery expectations. Other areas of job satisfaction listed by survey participants include maximizing sourcing development, reducing costs and problem solving.
PROBLEMS
What are the biggest problems facing you in your job today?
"Little or no leadtimes, inconsistent supplier deliveries, total disregard or lack of forecasts by sales," lead the list of problems facing Larry Montgomery, buyer for SFI of Tennessee, Memphis. Other problem areas singled out by survey participants include service, delivery and inventory. But the real problem says James R. Beverlin, senior buyer at Rexair, Cadillac, Mich., is "the time element. There's just too much to do" and very little support.
Tony Stephens, procurement manager at Cookson Electronics, Indianapolis, concurs, by noting that there is increased activity at his company "without increases in headcount."
IMPROVEMENT
How could the purchasing function be improved and how would you do it?
As Tina Sherman, buyer at Brookfield Engineering Laboratories, in Middleboro, Mass., sees it the key to improvement lies in more automation, better computerized systems, and far more "supplier responsibility." Karl R. Birch, of Zebra Technologies Corp., Camarillo, Calif., agrees and also sees a need for more flexibility in buying decisions and increased authority to make them. Most respondents tend to follow those lines of thinking and add another important factor: better communication up and down the reporting line.
GOALS
What is your ultimate career goal?
A job in upper management is the career goal of John Lukens, purchasing manager ar Steinberg Welding, Fosston, Minn. It's also the career goal of roughly 58% of the survey sample. To become a VP or or key executive "and run a successful organization" is the goal of Kesha A. Davis, minority supplier development manager at the Robert Bosch Corp., Farmington Hills, Mich.—and more than 73% of the women who took part in this survey. On the other hand, Michael Church, site procurement manager for Siemens Westinghouse, Plattsmouth, Neb., says he has "never really sat down to review his options."
SUITABILITY
Survey participants were asked directly, Would you choose purchasing if given a chance to start over?
YES 83.3%
NO 16.7%
Why all the loyalty? For many, most, procurement is an exciting business function. "Purchasing is a fast-paced, always changing, never the same job from day to day," says Brookfield's Sherman. "It's exciting." It offers "lots of variety and challenges on the job." And it requires a broad understanding of how everything relates to everything else, says Raymond R. Wojszynski, lead supply specialist, Curtis Wright Electro-Mechanical Corp., Cheswick, Pa.
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