The Profession

Different roles in Purchasing

One of the major benefits for anyone looking at a career in purchasing is the huge variety it offers, from different sectors to the type of role on offer. Nearly every sector from finance to manufacturing, retail and construction will have a purchasing and supply chain and will need either one expert or an expert team in place to manage it. The pressures and demands of every purchasing job will vary between sectors, and now is a great time to be in purchasing when value and cost considerations are at their highest. Some of the core skills needed to work in purchasing will not differ between each sector but no two jobs will ever be the same. Each sector has its own specific issues and goals, whether sustainable, ethical, or profit-motivated, and will need different kinds of specialists in place.

Job titles
The purchasing profession has a whole range of different job titles depending on the elements required for each post. Most companies will have a model that works best for them, but here are some of the job titles that you may come across: Procurement officer Buyer Supply chain manager Supplier relationship manager Contract manager Category buyer Purchasing manager E-procurement manager Assistant buyer

Most of these job titles will have similar roles and responsibilities, but the business goals and strategies will be dictated by the sector theyre in, whether public, private, or not-for-profit. Most purchasers will need to be skilled in contract management, and managing a supply chain can be an integral part of a purchasers job without the supply chain manager title. Its always worth checking the job description carefully, as the same job titles, may have a different focus on tasks.

Purchaser/buyer/procurement officer A purchaser has to develop good relationships with their suppliers, which means good soft skills such as communication. Successful working relationships often bring added benefits such as new ideas to business or innovative ways of approaching old problems Negotiation is also a key skill to have, as these relationships will not always be easy. The supplier wants to make money, and the buyer wants to save it. Getting close and gaining a full understanding of the products and services a company needs will make the process easier. Knowledge is power. So, being able to think laterally is a key skill along with managing the finances. Supply chain Graduates working in a supply chain role may find themselves working in operations, distribution, logistics and warehousing. These departments are different from a pure purchasing function, as they tend to involve managing the depots and making sure the flow of goods come in on time Often processes may need updating, new systems and procedures need implementing to keep operations running smoothly and effectively. A well-functioning supply chain is essential to the smooth running of any organisation. One of the attractions of a career in purchasing and supply management is the variety. The diverse range of sectors and industries means that a purchaser might be buying anything from manufacturing components, to helicopters, to travel or marketing services.

What different sectors can offer

Charity For charities and other not-for-profit organisations keeping overheads and purchasing costs down to a minimum is a priority. So, its even more important to source goods at the best possible price, while retaining quality and taking advantage of special deals and offers. This process can take time and it is not always easy to find suitable and interested suppliers. This is a really challenging role with the pressures charities face, especially when many charities

subscribe to sustainable and ethical practices.

Case study: St Mungo's Work in the charity sector relies on you using your own initiative much more. You have to be flexible, adaptable and able to provide solutions. As resources are tight, you have to work smarter and more effectively so as not to waste any time or money. "I dont have the luxury of a secretary or even much administration support its all hands on deck so prioritising workload is crucial. Everyday is different, dealing with long-term objectives hand in hand with the short-term issues that arise on an ongoing basis. "The other thing to remember in a charity is that many people are volunteers and they may not be as commercially aware as perhaps those working in a blue chip organisation. "But the benefits are worth it the job security is better and youre not solely focused on achieving commercial targets. This job is both worthwhile and challenging which is the beauty of it. I know Im working for a worthy cause and putting something back, especially as good purchasing is really adding value. Steve Fabian, Purchasing Manager, St Mungos Community Housing Association.

Local government The public sector offers massive scope in the type of purchasing you may get involved with. The challenge to get value for money is now more important than ever with the public deficit cuts reaching across all services. On a local government level, a purchaser may find themselves buying for schools, involved in construction projects, buying IT equipment, or even contributing to social work. The public sector has seen a large amount of change in recent years and operates within a variety of legislative boundaries and initiatives. Buying decisions are constrained by regulations from the EU and national government. It must never be forgotten that the money spent is taxpayers money so all buying decisions are under close scrutiny.

Case study: Portsmouth City Council

Local government spend in the region of 40 billion a year on the goods and services it provides. An increasing public demand for quality services and value for money has meant 'efficiency' has been put at the top of the agenda - after all this is taxpayers money we're spending. "Expectations from public services have increased considerably over the last 5 years and with the growing demand for value for money, public procurement is at the sharp end of providing cost efficient Public Services "The impact of local government procurement is all around us - it effects everyone. From the bricks used to build schools and the recruitment of the teachers within them or the standard of residential care in nursing homes, the local gym and leisure pool or even having your bins emptied each week procurement has a key part to play and can effect the quality of peoples day to day lives, that's why it's so rewarding.

"Local government procurement is such a dynamic and vibrant environment to work in and there has never been a better time to consider this as a career choice. There is a skills gap in local authorities for good procurement professionals so the opportunities are fantastic - now's the time to roll your sleeves up and get stuck in. David Pointon, Head of Procurement, Portsmouth City Council

Police buying Also within the public sector, all police forces will have dedicated teams of purchasers buying a whole array of items from uniforms, batons, catering services for the staff canteen, right the way through to high speed cars or even helicopters. Case study: Greater Manchester Police Over the past ten years procurement in the Police Service has moved from conducting more traditional contracting to a cutting edge procurement environment. The strong use of IT, in ordering, tendering, project management for contracting and a move into a strongly strategic perspective is evidence of this. "Being line manager for a team of procurement people, contracts management, and data analysts, part of my time is in leading this team. The non pay related spend for GMP is 70 million per year, and although part of these contracts constituting this spend are developed through activities within the section, large contracts are developed by cross functional teams.

"My team and I provide assistance and guidance, on procurement best practice, including conformity with the EU directives, so as to develop best value, whilst other functional specialists contribute their technical expertise about the commodity being procured. "Collaboration in police procurement is very widespread, with the forces being divided into regions with representatives of the procurement officers (such as myself) joining together to develop contracts, share information and discuss procurement matters. There is also collaboration at a national level. "The culture in police procurement is one of continual challenges; of keeping abreast of the changing face of procurement, whilst dealing with the rapid requirements of a modern force. It is intensely professional with a heavy emphasis on training. If you like challenges, are technically knowledgeable, and have strong interpersonal skills then police procurement could be for you! Stuart Norman, Principal Procurement Officer, Greater Manchester Police

Construction Again, the choice and scope for a purchaser working in the construction field is huge. Construction firms may get involved in building new houses, office blocks, tourist attractions, building new roads, bridges or even bigger, more demanding projects such as the channel tunnel or the Olympics village. This is a highly specialised field and needs close working relationships between the purchasing teams, the engineers, the architects and the site project managers. Equipment being sourced has to meet the stringent specification and requirements of the project. To complicate things further, needs and requirements may change as the project progresses. Thats the challenge and the excitement. Buyers also make sure products are received on time as any delays or issues in the supply chain will impact on the final project deadline. Retail buying Another specialist area of purchasing is retail which is different again because the bought-in goods go direct to the end user or customer. For example, buying wine for a major supermarket chain, may involve

purchasing the bottled and labelled product, or the contents for own-brand labelling. A buyer for a clothes retailer, may buy the buttons or zips, or the complete item. Case study: M&S Whether you know it as Marks & Spencer or M&S, we are a household name and one that cannot fail to deliver in service and quality to our customers or our brand and reputation will be very quickly damaged. I head up teams of buyers and category managers mainly in the non-chilled area of food so that covers a wide range of bakery goods, wines, drinks, canned groceries, confectionary, crisps and snacks, right through to flowers and plants very diverse! M&S has a very broad spectrum of products and services so our procurement people get a great deal of variety as they move across different departments, buying different things across different industries. Each category has its own dynamics a good example being our celebration category. I currently have a team of buyers looking at this years Christmas food range in terms of cakes, etc; its currently Easter, but these things have to be planned well in advance to make sure we have the right product, the right look and design and obviously make sure there will be the right amount on the shelves at the right time! "The packaging and design must be thought through so it fits with how the store is planning to look for the festive season this means cross working with other teams at M&S. "Team effort is crucial for this role we work alongside product developers, technologists and the retail team planning their stores we all integrate together, planning design and messaging with procurement becoming an active participant in the whole creative process. The secret is all in the planning. "Some things are often a little harder to be so well planned for. My bakery and bread team are currently looking at hot cross buns for the fast approaching Easter weekend. Many things can affect the supply on such a product such as the weather and temperature, it has to be managed on a day-to-day basis its much more an immediate item and has to be managed by reacting quickly. We have to be very close to whats going on day-to-day across the country as anything from the weather to food fashions or even TV ads can have an impact on what we buy day-to-day. Of course M&S is 100% own label products we control all the products that have our brand name associated with it, but we dont make our own products so supplier relationships are so important for M&S. We have to nurture those relationships, always keeping a commercial mind, but working together

as effectively as possible its a very interesting world!" Ian Bentley, Marks & Spencer Trading Executive

Key issues in the purchasing industry

Ever thought how much fun it is to spend money? Now imagine how much fun it could be to spend other peoples money! A job in purchasing gives you the opportunity to do just that every day and get paid for it; however, responsibility comes with it.

Get it right and the chief executive and finance director will know all about you.

Get it wrong and the chief executive and finance director and a whole host of others know all about you. That said, if you enjoy a challenge, purchasing offers the chance to make your mark in an industry thats really on the rise.

For many organisations their biggest cost (anywhere between 3580% of total costs) is the cost of goods and services bought from third parties. As such, purchasing is the most important single area of expenditure that businesses can control the difference between good and bad purchasing can be 30% or more. Increasingly, organisations are recognising the benefits that good purchasing can deliver. These include enhanced profits, a more effective supply chain and therefore purchasing is taking on a more important role.

Recent developments in the industry

The purchasing industry is definitely on the up due to a combination of factors including: A strong focus on cost cutting and efficiency has been a characteristic of the business environment of the early twenty-first century particularly in the last 12 months. This has played to the message of efficiency and savings a key facet of what procurement can deliver. Risk and reputation today purchasing is regarded as having a key part to play in mitigating business risk (for instance through ensuring the supply chain for key products and services is secure) and through

safeguarding reputation via responsible sourcing. These factors have raised the profile of procurement; particularly in sectors which have not traditionally been cost focused and added new dimensions to its role. The Chartered Institute of Purchasing and Supply (CIPS) has worked hard to raise the profile of purchasing as a profession in a variety of ways including the establishment of an accreditation scheme (to set an industry standard in terms of best practice) and the launch of the CIPS Awards in 2003 to recognise purchasing achievements. The Markit/CIPS Purchasing Managers Index (PMI), which was established in 1948, is now recognised as a leading indicator of manufacturing and overall economic growth. A composite of five weighted indices (new orders, production, employment, supplier deliveries and inventories) the PMI is popular because it is generally considered to be accurate and easy to interpret. Together, these and other factors have brought purchasing onto many boardroom agendas, raising both visibility and expectations there.

Thinking beyond price

Its little surprise therefore that successful purchasing is now seen going beyond simply negotiating the lowest price it is also about getting the right specifications and service levels and understanding the total costs incurred over the lifetime of owning something. Purchasing people need to be smart with lots of commercial acumen, good numeracy and strong negotiation skills.

Gaining buy in to buying

There is an increasingly strong relationship management aspect to purchasing as organisations continue to develop longer term, strategic partnerships with their key suppliers. Typically only a proportion of cost savings come from reduced prices; the majorities are achieved via managing supplier contracts effectively on an ongoing basis. Managing a long-term contractual relationship with a key strategic supplier is a fine art particularly more complex relationships such as those with consultants, lawyers, or marketing agencies.

This relationship management aspect goes beyond suppliers you must be able to sell buying to your colleagues. Nine times out of ten you will be negotiating contracts on behalf of other functions in the organisation including marketing, IT, operations and so on. These individuals have a diverse range of needs which you must be able to challenge and clarify before going to the market, all the time making sure that they are happy with the process. Having negotiated a deal you also need to be able to influence your colleagues behaviour in terms of consumption (i.e. how much they use) and process (i.e. how they buy). If you do not carry the business with you, then your colleagues may choose to ignore you or will be looking for an excuse to go back to the arrangements they had in place previously.

Where is it heading?
As the corporate world continues to evolve, so does purchasing. We believe some of the fundamental changes affecting purchasing include: Outsourcing of procurement In order to be more competitive, many businesses have split their purchasing into directs (key products and services which are used in manufacturing or sold on) and indirects (all non business critical purchasing i.e. office costs, purchased IT, purchased marketing, etc.). Direct spend gets the internal focus, whilst the management of the indirect spend is being outsourced to third parties (such as Proxima). Corporate Responsibility CR is an area organisations ignore at their peril. This focus extends to the public sector where sustainable procurement is now a hot topic. When it comes to delivering the CR agenda purchasing has a key role to play. This might involve challenging requirements for products, devising strategies for what happens to outdated goods purchased and looking at green energy. Furthermore, procurement must ensure that goods and services purchased support CR objectives and are commercially viable.

Low cost country sourcing Economic growth in China, Eastern Europe, India, etc. has transformed the manufacturing of many products. Procurement professionals need to develop the opportunities this trend presents whilst also mitigate the risks associated with sourcing from abroad. E-procurement Electronic procurement tools are becoming ever more affordable for organisations of all sizes and it is increasingly prominent in a number of forms, ranging from electronic auctions through to the automation of a range of purchasing activities. The challenge facing purchasing professionals today therefore is to get the most out the complex array of tools at their disposal. Getting the best people The sector has been growing, probably faster than it can easily grow good people. This makes it a great profession to join particularly since demand will drive up salaries. These trends seem set to continue and will undoubtedly be joined by others, making procurement an increasingly multi-faceted industry to work in. A successful chief procurement officer has to understand, anticipate and manage the impact these trends have on the purchasing landscape alongside the day to day handling of colleagues, the board, competitors and suppliers. Great fun if you like a challenge!

Job satisfaction in purchasing

Careers in purchasing have never looked better, according to the findings of the 2011 Purchasing & Supply Rwards research from The Chartered Institute of Purchasing & Supply, and Croner Reward. The survey is based on feedback from CIPS members and has proved that procurement and supply professionals salaries continue to move ahead of equivalent posts in other sectors and the also the national average. Public sector working hours have increased, with 43% of professionals in the public sector working 41

45 hours a week. Junior professionals are more likely to work longer hours, 53% work 46 50 hours up a week, a significant leap from 15% last year. However private sector workers are starting to relax with only 28% working up to 39 hours a week. The pay gap between public and private sectors is closing, down from a 6,000 difference to only 2,000. Job satisfaction in the procurement profession is high with 51% reporting satisfaction at a good or excellent level and only 19% planning to move jobs, down from 22% last year. Job security is high in the private sector at 94%, however in the public sector 27% feel their job security is poor or bad. Procurement professionals are confident about moving forward in their careers, 31% in the private sector felt they had good promotion prospects. The survey was conducted between October and December 2010, and the summary is available free to members on the CIPS website or on request from the Press Office to journalists. The full report is available for 180 to anyone who participated in the study, and for 360 to CIPS members, 440 to nonmembers. Call 01785 813 566 to order.

How procurement can reduce our environmental impact

If you care about the number of miles your fruit and veg have travelled, you recycle, reuse and reduce the waste you produce, and care where your jeans come from; then youre already part of the one of the major issues the procurement profession is focusing on. As organisations tighten belts, and boardrooms face strategic objectives to build a sustainable agenda, the professions time is now. Calls for efficiency and demonstrating your company as the company of choice, and saving money are all key procurement issues. These are all critical aspects for a business, but none are more important than incorporating sustainability, ethical practice and awareness of risk. Purchasings key role is often seen as just cost cutting, but its much more far-reaching than that both internally and externally, whether managing relationships with colleagues, to working in the global arena. The world has become a small place and we have to think and act in a global way and, understand the impact of our choices and actions. Procurement professionals are now being asked to solve complex problems in responsible, yet innovative ways, each day.

Increasing reuse
Recycling and reducing waste is not a new idea. The Greater London Authority (GLA) purchasing team already cares about where their waste goes. Not only because it is the responsible thing to do, or because its driven by customer demand, there are actual monetary savings to be made by reducing the amount of waste to landfill. The GLA came up with a creative way of reusing old fire hoses last year. Instead of dumping them, the fire hoses avoided their landfill fate and instead, were used to make hammocks for monkeys in zoos. What the monkeys didnt use, were woven into belts and handbags. That was obviously a fun way to reduce landfill, but there are sensible ways to make reductions that will have people scratching their heads and wondering why no one had thought of it before. The purchasing team at Adnams, a Suffolk brewery, recently reduced the thickness of their glass beer bottles to save on production costs. Not only did this save them money because they bought less glass for manufacture, but the refrigeration costs were also reduced. Because the bottle was thinner and lighter, their fuel bills also went down as the lorries carried lighter loads. One decision that had quite an impact. Adnams saved tens of thousands of pounds, year on year, and improved their green credentials by reducing their carbon emissions by 415 tonnes annually. This made them a more attractive company to buy from. They even launched a carbon neutral beer on the back of their success. They were on a roll.

Reducing waste
There are numerous ways of reducing waste and carbon footprints, but ethics has a role to play in the sustainability angle too. The clothing and household goods chain, Marks and Spencer (M&S) have worked on a number of issues to become more ethical in their practices. The M&S purchasing team decided to review the reality of factory life for their workers in developing countries and worked towards making it more efficient, greener, and the factory a nicer place to work. As a result of the review, in April 2008 opened its first 100% carbon neutral, green and ethical factory in Sri Lanka. As well as installing solar panels and harvesting rainwater, the team implemented wider workforce issues such as work rotation, wages 35% above the local minimum, benefits such as free breakfast, healthcare,

and transportation allowances plus only employing workers aged 16 and over. This was an important move. Not only were the working lives of factory workers enriched, but production became more efficient and the quality of work improved. As a by-product of quality improvement, the company also found that the factory generated far less waste. Staff retention rates went up and absenteeism went down as people began to feel part of an organisation that cared for them. Not all companies will have their own factories and control their own manufacture to maintain standards, as most will rely on suppliers acting as ethically as they do. Being remote from critical aspects of the supply chain poses many risks. Purchasing professionals not only create value for their organisations, they are also there to protect it. One suppliers unethical methods can damage the reputation of the buyer. A job in purchasing can really make a difference.