A letter, a challenge

Paul Teague, Editor-in-Chief -- Purchasing, 10/20/2005

It's good to listen to what others have to say about your profession, even when you don't like what you hear. It can make you think, and that thinking can lead to renewed commitment to fundamentals and even new directions in strategies. That's why I recommend everyone read one of the "Readers' Rants" recently posted on our website, www.purchasing.com. The anonymous writer says that "purchasing creates more headaches than solving them if you give them too much power in the design process."

Ouch! There's a statement that touches the nerve. The writer claims that purchasing staffs too often look at component price only, not the true costs. Is he right? Not at all, in my opinion. In fact, one of the major trends over the last several years is to look at total cost, not just quoted price, and to judge suppliers also by the quality of their products and services, their delivery records, their financial stability, their likely ability to continue delivering the part for the life of your product, and the direction they're taking their own technology, among other criteria.

Yet some people still think of purchasing as a profession of people wearing green eyeshades and comparing prices alone as they source materials. It's an old image that was given birth, at least in part, by CEOs and other top-level executives who continually pushed for cost reductions no matter what the consequences. And it was never an entirely accurate image at that. But in some quarters it persists, as our "Rant" writer shows.

Readers of this magazine know that the world has changed dramatically. Purchasing is no longer a backwater in organizations. Study after study has shown the increasing reliance CEOs place on purchasing today to strike supplier relationships that can bring a competitive advantage well beyond mere price of components. In the most progressive companies, purchasing is morphing into a profit enabler.

Apparently, not everyone knows that. We're glad we got that maddening "Rant," we thank the writer, and encourage more dialogue. The "Rant" is a challenge to continue moving beyond "price-alone" considerations and to continue efforts to tie purchasing tightly to corporate business objectives. And, it's a reminder that we have to continue speaking up within our own companies to let management know the great potential for bringing about business success that purchasing holds.