Today's buyer is High-Tech

'He' may be a 'she,' uses the Internet regularly, and participates in high-level corporate committees.

By -- Purchasing, 2/22/2001

he purchasing professional at the beginning of the 21 ^st century is dramatically different from buyers of just 16 years ago.

Today's buyer is very focused on strategic sourcing, according to the latest Profile of the Purchasing Professional conducted by PurchasingMagazine.

• Eighty-five percent of the executives interviewed indicate that their companies are consolidating their purchases with fewer suppliers;

• An average of 42% of all purchasing dollars is committed as part of long-term contracts. A third of items purchased is under some form of long-term agreement. These percentages are marginally higher than those 10 years ago, but a significant increase from 1984;

• Fifty-eight percent of respondents answering this question indicate that contract buying is on the increase. Fifteen percent say it is decreasing.

Another sign of the new buyer: The purchasing department is highly computerized, with buyers using the Internet on a regular basis. Another: Purchasing is no longer a functional "silo," or separate function. Purchasing pros hold key seats on corporate committees and rotate through other departments.

Other highlights of this year's study follow:

PROFESSIONAL RESPONSIBILITIES

SUPERVISION AND SUPERVISORY RESPONSIBILITY

Purchasing department heads generally report to top-level company executives, including president, vice president of operations, vice president of manufacturing, materials manager and chief financial officer. Among respondents with supervisory responsibilities, the average number of subordinates is seven. Those with $50 million+ purchasing are responsible for supervising an average of seven purchasing professionals.

DOLLAR VOLUME

The median dollar-volume responsibility of respondents to this year's Profile is $10 million; the average is $77 million-somewhat skewed by one executive who oversees purchasing of $4.5 billion of expenditures. Taking him out of the average calculation, the average dollar volume is $48 million. The median increase in dollar responsibility is 10%, the average 21%.

COMMODITIES

This year's Profile participants indicate that the five most important items they purchase, in terms of dollars spent, are: electrical and electronics, primary metals, mechanical components, chemicals and fabricated metals.

INVENTORY

Fifty-nine percent of the purchasing executives are responsible for maintaining inventory levels. This figure is a decrease from the past. Over half (52%) of those with inventory responsibilities share the responsibility with others.

PURCHASING STRATEGIES

An average of 42% of all purchasing dollars is committed as part of long-term contracts. A third of items purchased is under some form of long-term agreement. These percentages are marginally higher than those 10 years ago, but are a significant increase from 1984. Fifty-eight percent of respondents answering this question indicate that contract buying is on the increase. Fifteen percent say it is decreasing. The positive upward trend toward more long-term contract buying has started to level off or decrease in the past decade. Eighty-five percent of the executives interviewed indicate that their companies are consolidating their purchases with fewer suppliers.

The incidence of long-term buying agreements has increased since the mid-1980's, but has remained stable (with some variability between this year and last year) in the past few years.

More than three out of four indicate that they prefer to maintain multiple sources for the items they purchase, but the percentage who support multiple sourcing has decreased since the late 1980s.

Thirty-eight percent of respondents use corporate procurement cards.

Sixty-four percent of purchasing professionals indicate that they import; half of these have increased their total purchases in the past year while forty-one percent remained steady. Countertrade enters into the importing equation somewhat for about a third of the purchasing professionals whom import.

SUPPLIER EVALUATION

Sixty-seven percent of purchasing executives have systems in place for evaluating supplier performance. Sixty-five percent of these describe their performance-evaluation procedures as "formal."

Quality has consistently been rated the most important factor in supplier performance. Delivery was the second most important factor, with price lagging behind.

COMPUTERIZATION AND JUST-IN-TIME MANAGEMENT

Ninety-six percent of the purchasing professionals interviewed indicate that their departments make use of computers. Eighty-six percent of all respondents indicate that their departments use computers for online processes such as requirements planning/scheduling, PO writing, etc. Eighty-two percent indicate that their purchasing departments use computers for batch reports (inventory status, vendor rating, etc.).

Use of the computer for strategic functions (model-making simulations for planning, etc.) is still the domain of the high-level executive; 67% of VPs interviewed use it in this way, well above the average of 26%.

Eighty percent of purchasing professionals use the Internet on at least a weekly basis.

Almost two-thirds of the respondents are involved with just-in-time management, and of these, two in three say their JIT systems are pretty much in operation.

TEAMWORK IS GROWING

Purchasing executives meet regularly with colleagues representing every key function of their companies. They most frequently meet with coworkers from production. Approximately two out of three purchasing professionals serve on management committees within their companies. Frequently mentioned committees include quality, safety, financial/ cost reduction, overall management, and product development as well as specific purchasing committees. In 1997, only one-third of respondents indicated that they served on committees.

Forty-five percent of respondents are involved in advanced product development teams.

PERSONAL BACKGROUND

DEMOGRAPHIC PROFILE

The typical purchasing executive is a 43-44-year-old male who has been employed in purchasing approximately 11-13 years. This profile has remained fairly consistent over the years. The proportion of women in purchasing, however, has almost tripled since 1984, from 10% to 28%.

ENTRY INTO THE PURCHASING PROFESSION

Forty-one percent of all purchasing executives are working in purchasing as a deliberate career choice. Forty-three percent of all purchasing executives entered the purchasing profession as a result of company assignment. Of those who chose purchasing as a long-term career, more than three-fourths (79%) are happy with their choice and would do it again.

EXPERIENCE

The typical purchasing professional has been employed in purchasing for an average of 13 years, down from 1999. The median length of employment in the field is 11 years. Inventory (61%) and production (51%) are the most common areas of non-purchasing experience for purchasing professionals.

EDUCATION

Seventy-three percent of all purchasing executives have four-year college degrees. Older professionals and those who have been in the field the longest are less likely to have baccalaureate degrees than their counterparts.

Twenty-four percent of the purchasing professionals who do not currently have four-year degrees are working toward one. This is up from 16% in 1999 and 21% in 1997. Business is the most popular field of study among purchasing executives. More than four out of five men have college degrees, with only a slight majority of women having graduated college. More women who lack degrees (38%) are seeking them than men are (10%).

CERTIFICATION

Twenty-three percent of purchasing executives are C.P.M.s. This has been increasing gradually over the past couple of decades. Purchasing professionals with the greatest longevity in the field are among the most likely to be certified. Thirty-four percent of those with 11+ years purchasing experience are C.P.M.s. Men are more likely to be C.P.M.s than women (25% vs. 19%) are.

Twenty-seven percent describe forms of certification other than C.P.M. The most common other purchasing certification is CPIM.

JOB SATISFACTION & CAREER OBJECTIVES

JOB SATISFACTION

Most purchasing professionals (75%) would choose to work in purchasing if given the opportunity to begin their careers again. The most frequently mentioned positive aspects of a career in purchasing include: challenging, diverse/changes everyday, enjoyable/rewarding, and people-oriented. Ability to affect the bottom line or be an important part of the company was also frequently mentioned, but it has become a more important reason than in previous years.

Negative aspects of purchasing positions include: low recognition, preferring other areas, pressure/stress, low pay and limited advancement.

Saving money and negotiating are two of the leading areas where purchasing professionals find the most satisfaction.

To improve the purchasing function, better and more training, use of the Internet, and more automation/updating of systems were the most frequent recommendations.

CAREER GOALS

Promotion to purchasing management is the most often volunteered career goal of purchasing professionals. Advancement in general management is the second most sought-after goal of purchasing executives. This is the reverse of last year.

Buyers are committing more business to strategic suppliers in long-term deals.

Eighty-two percent of the purchasing departments studied and are online for requirements planning, scheduling or purchase order activity.