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Rants & Ravings

Staff -- Purchasing, 11/17/2005

Use it better

Regarding "Factory supplies team kicks it up a notch" (PURCHASING, October 6, 2005; p. 33) and the letter in your November 3 issue from Mr. Simpson, I would agree with some of what Mr. Simpson says. However, it isn't always about buying better. A good portion of the UTC savings comes from focusing on "using" better and that comes from operations, where the money is being spent. Operations coupled with Supply Management can be a powerful force to reduce overall indirect spend for any company by focusing collectively on "use better/buy better."

Mike Lentz, Moline, Ill.

P-cards have limits

Regarding "Purchasing cards pack more punch" (PURCHASING, October 20, 2005; p.46), there is no mention of pcard use for inventory spend—a huge risk for loss of data and measurability. My company buys service and replacement parts for inventory to a branch network, and materials are tracked and measured through SAP, affording opportunities for constant evaluation. Corporate purchasing is centralized, however our branches can also buy inventory at suppliers on their pcard. Even though pcards have limits, a large amount of purchases have been noncompliant, and are extremely difficult to track. People in charge of the pcard program never take the time to monitor to the detail level required, and these purchases are going to nonapproved suppliers. This unregulated spend negates all the good contracts that have been established for the benefit of these branches, and our service industry, thus increasing our material costs. It also is a risk to our business, as replacement parts must be procured to engineered specifications, and pcard holders do not buy to the same quality or guidelines. Other purchasing professionals in my industry also have reiterated this same concern at conferences.

Readers should be aware of the downside of this type of procurement, if used for these purposes and not properly tracked and monitored, with enforceable compliance regulations in place.

Mary Fara Lewis, Moline, Ill.

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