A recommendation for The Purchasing Machine

By Douglas A. Smock -- Purchasing, 4/5/2001

For an investment of about $20,000 a year, your procurement/supply organization can return a minimum of $200,000 a year in increased profits to your company.

That's the big message from an excellent new book published by The Free Press (New York) called The Purchasing Machine. Co-author Dave Nelson distills experience from more than 40 years in purchasing into the words of wisdom in this book. In Nelson's view companies can improve profitability 20%-30% by improved supply practices.

Nelson and co-authors Patricia Moody and Jonathan Stegner outline 20 best practices in supply and then tell how the 10 best supply organizations in America (their picks) deliver the goods. A lot of it is not new. Nelson's own story has been told in PURCHASING Magazine a few times, and as recently as last December (do a search on David Nelson at www.purchasing.com). The amazing turnaround at Harley-Davidson (PURCHASING 's 2000 Medal of Excellence winner) has been reported in depth. Ditto Chrysler, IBM, Honda, Motorola, Flextronics and others.

The Purchasing Machine puts the information through the filters of the three talented authors. Plus they create a roadmap to success for other purchasing organizations.

Two points are strongly made. Many supply organizations need to "level up" to senior management expectations. And then they need to adequately document what they are doing in language that the CEO understands.

Many supply management professionals "have failed to translate their procurement initiatives into meaningful metrics well recognized among leaders; their approach to strategic profitability and market growth discussions, therefore, is limited to simple tactical achievement of someone else's objectives," the book states.

Nelson's results at Deere have been so dramatic that he is careful in personal conversations not to divulge purchasing initiatives that have not already met public disclosure requirements established by the Securities and Exchange Commission.

The book bounces around a bit, but it's loaded with inspiration and specific ideas that are sure to improve your professional performance.