Assess your company’s ‘purchasing’ department skills
How can you enhance your purchasing department’s knowledge of suppliers and technologies?
The purchasing department owes part of its added value to monitoring and watch activities covering markets, products, suppliers and technologies … Overarching activities that cannot be carried out by internal clients, who tend to favour operational, fast and familiar solutions, and do not always have the time to monitor their suppliers’ innovations.
Market, technologies, innovations: keeping track of trends
Among buyers’ 5 key skills, market expertise is a must.
| Key skills | Description |
| 1. Leadership & Management | Listening, influence, conflict management, delegation, motivation, organisation |
| 2. Process & Project | Persuasion, languages, creativity, project management, risk management, regulatory compliance, cultural adaptability |
| 3. Customer Expertise | Understanding of objectives – processes – constraints, ability to draft a specification |
| 4. Market Expertise | Rapid acquisition of new technologies or standards, benchmarking, networking, knowledge of players with their strengths and weaknesses |
| 5. Technical Purchasing Expertise | Analysis (cost structure, use of internal and external databases, purchasing portfolio, use of IT tools (ERP, office software, internet)Negotiation (preparation, behaviour, SWOT analysis, tactics, strategy, persuasion)Tender Expertise (mastery of the operating procedure, e-RFx tools, influence, legal, finance)SRM and Category Management (purchasing policy, time and priority management, dashboards and indicators, TCO, conflict resolution, Motivation, creativity) |
In practical terms, it is important for a buyer to keep track of technology developments that could impact purchasing. Thinking in terms of “overall added value”, new technologies such as the internet of things, geolocation and hyper-localisation, big data or the usage economy are avenues for improving profitability that should not be underestimated. The purchasing function can certainly deliver value gains by having at least a basic knowledge of the “standard” technologies, products and services within the purchasing domain, and through supplier benchmarking, but much broader gains can be generated by taking an interest in new technologies or services and imagining how they could fit into internal product design processes or internal services.
Building a professional network
The internet is certainly a source of knowledge that will enable you to keep track of your markets, suppliers and technologies. However, the personal contacts you can maintain with various people at trade shows, dedicated evening events or business lunches are also information sources to activate regularly. All too often, when it comes to networking, people think “general-purpose social network”. You can also develop your own network, for example by setting up a network of partners to cope with a logistics or supply crisis. Do not forget dedicated networks, such as the one for public buyers, or those giving access to companies in the sheltered sector (ESAT – CAT …). Finally, your own company’s internal network is a very rich source of information, because almost everyone is in contact with suppliers and has their own knowledge.
Analysing and summarising information, creating competition among your suppliers
Once all the sources and information have been identified, you will then still need to analyse and summarise them. For example, you can carry out a forward-looking study to determine the future trends of your markets (or use existing studies if they are available), thanks to your knowledge of the sector and/or the analysis of your latest spend figures. You can also study the constraints of your suppliers’ markets, in order to anticipate the impacts that these trends could have in the future on your own purchasing (for example, the change in raw material prices).
Finally, various models exist for summarising and using the information you have gathered. Porter’s forces diagram is a good tool for analysing and understanding a market. It involves assessing:
• The threat of new entrants
• The competitive rivalry among current market players
• The threat of substitute products (including innovations)
• The bargaining power of upstream market players (suppliers)
• The bargaining power of downstream market players (customers)