The Power of Purchasing
Well, today we find ourselves diving into Purchasing departments to see what makes them tick. As you might imagine, no company can exist without buying “stuff” and the bigger the business, the more “stuff” there is to buy. And make no mistake, it, too, is a very important component in any company. Have you sensed a pattern here yet? You know, like every section is important and without even one, you’re NOT firing on all cylinders.
Now unless you have the cheapest boss ever and you are so desperate to keep the job he/she promised you, as an employee you would never think of buying your own pens, pencils, staplers, or paper with the company’s logo on it, etc. (a coffee mug with a sarcastic comment on it, yes, but that’s about it). Your company has to spend way more money than you think in order to make sure everyone has the right supplies and enough of them – imagine not having a desk or a chair if you need to use a computer! What if the boss wants a giant sized portrait of him/herself to hang on the wall? For these reasons alone, you need someone in charge of this. Clearly, if there are only three employees, it’s easier to do but if you have a bigger company, there is a whole department just for this. Besides, to whom would you complain when you have no more toilet paper in the WC? Ha!
This, however, is only the tip of the iceberg. In a manufacturing or construction business (just as examples) there is raw material to consider- perhaps iron, steel, lumber, etc and might also include machinery, tools, delivery trucks, etc. If the company has small machinery, large machinery, any kind of machinery, they’ll need to be serviced at some point, maybe even replaced, and that ain’t cheap! Saving up lunch money will never do it. It might sound a bit silly to point out the obvious; however, it requires skill and hard work to get the job done properly. Remember what came up in the first article? It’s all about making a profit, so, the purchasing wizards need to make sure they get the best product for the best price! They’re like tightrope walkers- pay too little, get a cheaply made product that breaks just after the warranty expires or pay too much to get the Rolls Royce of machinery (maybe even a Rolls Royce) and you might bankrupt the company if you do that more than once. Unfortunately, those working for smaller companies are at a disadvantage here- no bulk buying power so harder to get the good deals. Makes you just want to cry for them.
In yet another example of departmental interdependence, since these purchasing gurus have a lot of paperwork to fill out and have to be good time managers to ensure that products get delivered in a timely fashion, they need to work closely with the Accounting department who oversee the budget and approval process. If Accounting says there’s no money, well, there’s no money and back goes that new cappuccino machine!
Ultimately, the Purchasing department is connected to everyone in the company, whether or not they realize it. Just as one needs to be nice to the Communications people and the Accounting people, one also needs to have a good relationship with Purchasing. It’s one thing not to have enough staples or paper clips but altogether a different matter if customers do not get their products on time or according to their specifications. Getting a dump truck when you ordered a cement truck is not funny. That’s serious business and, over time, if the inefficiency continues, the company suffers. Efficient flow of information to all concerned ensures good communication and good communication means fewer mistakes and fewer mistakes means more profit and more profit means you get to keep your fabulous job! So, talk to each other people, talk!