A profession turns the corner
Why so many buyers are in love with their jobs
By James Morgan -- Purchasing, 9/16/2004 2:00:00 AM
Today's purchasing professional is much more likely to be a woman than 10 or even five years ago. He/she also is likely to be responsible for spending twice as many dollars as a comparable buying pro of 10 years ago. What's more, today's purchasing professional seems to really like the job he/she is doing and is more likely to have chosen purchasing as a career path than in the past. This comes about even as paperwork and transaction processing continue to be a bane of this professional's existence.
What's so good about the job? In many cases it isn't the pay. When asked outright, many cite such things as being given freedom to negotiate long-term agreements with selected suppliers, make outsourcing decisions, or play out-front roles in corporate spending. In short, large numbers of purchasing professionals look upon their jobs in terms of playing a significant role in corporate profitability, a trend that has increased in recent years as companies work more diligently to control costs.
The above words are among the findings of Purchasing magazine's latest survey of procurement officers and supply chain executives. An examination of this latest picture of the purchasing executive shows a professional who regularly handles huge spend numbers, is responsible for multiple 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.
To produce this comprehensive picture of the purchasing pro, the Purchasing survey used a complex grid covering many multipart and inter-related questions. Some questions asked are identical to those asked in past years, others are new, and some questions cover completely unexplored aspects of the job. This year's report examines the anatomy of the purchasing professional from five distinct perspectives personal background, professional responsibility, strategic sourcing, strategic planning and buying, and career outlook.
PERSONAL BACKGROUND
For years purchasing tended to be thought of in terms of manufacturing and meeting production line schedules. In the process, purchasing tended to be deemed an unsuitable job for a woman—except as a clerk or facilitator. Such opinions held on for a long time after purchasing began losing its blue-collar image. But, gradually since the 1980s purchasing has been opening its doors to women. The three sets of figures that follow tell a story of the changes that are happening on this front:
| Year | % Male | % Female |
| 2004 | 67% | 33% |
| 2003 | 68% | 32% |
| 1994 | 82% | 18% |
Age
The population of the purchasing/supply department has aged slightly over the past decade. The numbers:
| Year | Average age |
| 2004 | 46.2 |
| 2003 | 46.1 |
| 1994 | 44.1 |
Education
The percent of purchasing professionals with college degrees now stands at 68%, up from 65% in 1994. More than 55% of the degrees are in business, followed by science (19%), engineering (12%), liberal arts (10%), and assorted hybrid specialties (4%). In addition, 22% of respondents also hold advanced degrees. Nearly 60% of the advanced degrees are MBAs. Another 13% of respondents are working toward degrees.
Professional certification and history
Currently 25.8% of survey participants hold either a C.P.M. certification from the Institute for Supply Management and/or a C.P.I.M. certification from the American Production and Inventory Control Society. The average purchasing professional in this survey has been in the purchasing function for 12.3 years, with his/her present company 6.6 years, and in purchasing at the present company for 5.3 years.
Non-purchasing experience
Most purchasing professionals appear to have come to purchasing with experience in one or more non-purchasing areas. Following are those most frequently cited by purchasing professionals:
| Production | 63% |
| Sales | 58% |
| Engineering | 57% |
| Inventory | 49% |
| Quality | 34% |
| Sales | 32% |
| Marketing | 19% |
| Accounting/finance | 15% |
Job entrance
How do purchasing professionals initially get into purchasing? Survey participants cite these three main entrance points:
| Company assigned it | 17% |
| Part of long-term company career plan | 62% |
| Part of non-purchasing career plan | 21% |
PROFESSIONAL RESPONSIBILITY
Job title
The purchasing profession embraces a wide swathe of job titles. The most commonly used are:
| Purchasing manager | 36.4% |
| Senior buyer | 21.2% |
| Sourcing/supply chain manager | 15.2% |
| VP-purchasing | 12.1% |
| Buyer/purchasing agent | 8.0% |
| Materials/supply manager | 6.1% |
Time allocation
Purchasing professionals were asked to estimate how they allocate their time in purchasing. These four areas account for 80% of the purchasing executive's time usage:
| Sourcing (including supply research, source selection) | 35% |
| Procurement (including transaction processing) | 20% |
| Supply management (including inventory control, logistics) | 15% |
| New product development | 10% |
Freight transportation
Almost half of all purchasing departments are responsible for freight transportation.
| Yes | 47.4% |
| No | 52.6% |
Often, however, freight transportation is a shared responsibility. Here's a further breakdown:
| Inbound | 22.2% |
| Outbound | 5.5% |
| Both | 72.3% |
Procurement cards
Corporate procurement cards are now used in more than half of all firms.
Usage:
| Yes | 52.5% |
| No | 47.5% |
Reporting structures
The title of the person to whom purchasing reports varies widely. These are the ones most cited by respondents.
| President/CEO | 34% |
| Operations manager | 27% |
| Production manager | 21% |
| Materials manager | 10% |
| CFO | 5% |
| COO | 3% |
Dollar value of purchases
This appears to be a near impossible number to track or even comprehend. Answers to this question varied from a few million dollars to hundreds of millions. A best-guess average based on telephone survey numbers is between $20 million and $35 million.
STRATEGIC SOURCING
Contract buying
The use of long-term agreements is generally cited as the most important strategy currently in use by purchasing professionals. In terms of dollars, just slightly over 25% of purchases is covered by long-term agreements. In terms of pieces, slightly over 37% of purchases are made as part of long-term agreements with suppliers.
Use of long-term agreements is up 52% over last year and is expected to increase through the decade as buyers continue to take steps to consolidate their purchases with fewer suppliers. One outcome of the increased use of contracts and long-term purchasing agreements has been a general willingness of buyers to consolidate their supply bases around fewer suppliers. But, despite their willingness to explore downsizing, many purchasing professionals are doing so with caution. To wit: Even though most purchasing professionals express a willingness to downsize supplier ranks, 86% of respondents indicated that they still prefer to have more than a single source for major production materials and components. As the purchasing agent for one metal working company ironically points out, "We look upon use of secondary suppliers as a bit of supply base insurance."
Buying globally
Perhaps the greatest amount of action on the strategic buying front is the globalization of supply bases. In fact, activity on the global front has risen more than 60% as a growing number of suppliers and buyers show an interest in solving the many impediments to global outsourcing. Among the products and materials seeing the most global buying activity in the past six months: fasteners, metal parts, machine tools, hardware, resins, chemicals, and a wide array of electronic components.
STRATEGIC PLANNING AND BUYING
Rating suppliers
Sixty-three percent of purchasing executives interviewed for this survey have a system for rating current supplier performance. Relative ratings (out of 100%) are most often assigned for these four factors:
| Quality | 22% |
| Delivery | 31% |
| Technical service | 16% |
| Price | 27% |
Information systems
Most purchasing information systems fall into one of these three categories:
| 1. Integrated with main internal corporate systems and those of external systems | 23% |
| 2. Integrated with major corporate systems | 43% |
| 3. Standalone system sharing information within the purchasing organization | 34% |
Just-in-time management
| Purchasing involvement? | |
| Yes | 38% |
| No | 62% |
Product development teams
| Purchasing involvement? | |
| Yes | 53% |
| No | 47% |
| Time devoted to team activities: | 12% |
Purchasing's major responsibilities to team:
-
Intellectual property agreements
-
Identification of suppliers
-
Sourcing expertise
Cross-functional meetings
Most purchasing operations meet with other corporate functions on a regular basis. Here's a look at what percentage of buyers are meeting with other functions and how often:
| Daily | Weekly | Monthly | |
| Top management | 26% | 33% | 18% |
| Design | 10% | 51% | 17% |
| Production | 32% | 27% | 5% |
| Maintenance | 14% | 32% | 9% |
| Marketing | 7% | 15% | 2% |
| Financial/accounting | 2% | 37% | 20% |
| (percent of buyers reporting) | |||
Inventory
In 36% of the companies surveyed, purchasing is responsible for maintaining inventory levels. However, in 60% of the companies with inventory responsibility it is a shared responsibility (mostly with production, finance/accounting).
New activities
Procurement has been playing a growing role in the following areas: procurement system development, licensing, project design, contracts, cost reduction, strategic sourcing, and systems contracting.
Downsizing
More than 42% of purchasing professionals surveyed reported purchasing department layoffs. Of those reporting downsizing, only 11% characterized it as radical downsizing.
Travel
The average procurement professional takes an average of 4.6 business trips per year, traveling an average of 1,800 miles per trip in order to:
-
Negotiate with suppliers
-
Investigate supplier facilities
-
Attend trade shows/seminars
-
Make internal corporate visits
JOB SATISFACTION AND CAREER
This portion of the survey is much more subjective than the other areas and cannot produce objective data. Nevertheless, while the questions often defy statistical analysis, they do constitute an important part of our profile of the purchasing professional.
"When everything comes together and you save the company money, that's satisfaction," says Tim Dillon, materials controller at Leiner Health Products of Carson, Calif. A preponderance of buying professionals agree with that definition of satisfaction. Also receiving high marks for satisfaction were work in negotiation, cost reduction, and professional development. The factor that seems to play loudest here is the sense of personal involvement that many purchasing professionals acquire in these areas.
If given the chance to start over, would buyers choose purchasing again? The answer wasn't even close. Purchasing professionals voted:
| Yes | 70.9% |
| No | 29.1% |
Ginny C. Huseby, senior buyer at a Bosch Automotive plant in Charleston, S.C., for instance, loves the "challenge of working with suppliers, identifying potential problems," and looking for cost reduction candidates. Many, like the purchasing manager at Alexion Pharmaceuticals, Cheshire, Conn. say "yes" if the new job gave them the ability to make a major contribution to the success of the company. Randall Gail, vice president of purchasing at Harvey Industries in Waltham, Mass., revels in the variety of problems he gets to solve and the chance to impact the bottom line. On the other hand, Stanley Miller, supervisor of technical purchasing for Miami-based Carnival Cruise Lines, rues purchasing's loss of freedom in recent years.
Most of the career goals expressed by purchasing professionals tend to be on the conservative side. Leah Orvis, supply manager of raw materials at Autumn Harp in Bristol, Vt., aims to earn her C.P.M degree. Many survey respondents have career plans that are linked to further advancement in purchasing management. William F. Koons, supply chain manager at a Raytheon plant in State College, Pa., plans to retire by age 62.
Among the biggest problems purchasing execs are struggling with this year, says Terry Schulz, senior buyer at Columbus Manufacturing in Columbus, Wis., are rising materials costs and unpredictable leadtimes. Another problem is the growing unsuitability of suppliers. For many buyers there is a growing recognition that they have allowed too many incompetent suppliers to squeak into their supply bases.
Salary Survey
12/11/2008How buyers are changing
08/13/2003PROFILE OF THE PURCHASING PROFESSIONAL
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