Purchasing and supply management

For any business, be it a huge firm like British Airways or a small PR agency, spending money is the first step to making money. But, most importantly, they must spend it wisely, and this is where professional purchasers come in. They have to account for everything a company needs to run its daily affairs, from pencils to aircraft to television advertising time.

Spend too much money on goods and services and the cost eats away at profits. Spend too little and poor quality means the company cannot perform competitively. Both scenarios put the very existence of the firm or organisation in jeopardy. Seen from this angle, procurement is critical to business.

Like all business-critical functions it needs the best and the brightest to join its ranks. Procurement has to fight with other disciplines in the financial, engineering and business world for the attention of young people. However, what makes purchasing stand out is that it grants the right professionals a lot of freedom from a young age.

Courses available

A growing number of undergraduates are choosing to join the purchasing and supply profession upon graduation, and indeed there are now a wide variety of UK universities offering purchasing- and supply-related degree courses. Some more general business degrees also include core elements of purchasing and supply disciplines in their syllabus. Also, the Chartered Institute of Purchasing & Supply (CIPS) offer a degree-level professional qualification, which most people study once they start work to gain the professional standard of MCIPS (Member of the Chartered Institute of Purchasing & Supply). Some university degree courses are accredited by CIPS and along with three-years work experience allow individuals to apply for full membership of the Institute without having to study the graduate diploma.

Choice and variety

One of the most beneficial things about a career in purchasing is that a well-qualified purchasing professional can walk into a wide range of environments where they can use their skills to buy a whole variety of products and services. For example, in a manufacturing environment such as a car plant, the purchaser would be directly involved in buying components such as wheels, lights and shock absorbers for the production line, as well as more general services such as advertising and marketing. In financial services the needs will be different, looking at purchasing anything from telecommunication systems, catering services, marketing and design through to security systems, or even cash machines if working for a bank.

A slightly different role for a purchaser is in retail purchasing. As with other market sectors, some purchasers within the organisation buy goods and services for use by the company itself, whereas other buyers are more involved in the merchandise side, taking responsibility for selecting products which are sold in the shops themselves. The scope and choice within this profession is what makes it so diverse, with no two jobs ever being the same.

Qualities and skills

Whilst the traditional purchasing skills Ð such as financial management, contract management, cost reduction and basic negotiation Ð are still key, they are largely learned skills and can be acquired by most people through the right training and education programmes. However, in order to succeed in today's more strategic environment, relationship management becomes crucial. The current relationship between partners (suppliers) is unlike the traditional adversarial one where the buyer frequently pits one supplier against another during the year, focusing entirely on unit cost in order to get the best price. In a strategic procurement environment both companies view each other as relatively equal in terms of the relationship, and work with each other right from the start to share information, training, support, technical input and ideas to reduce the total overall cost. At the same time the buyer is also working closely with internal customers to ensure their needs are met, sometimes having to sell procurement to departments such as marketing or IT in order to gain their "buy-in" to the process. Good relationship management skills are therefore critical, yet less easily learned in a classroom environment. Those individuals who are generally most successful within the procurement environment understand just how important it is to develop these skills, including listening, understanding, communicating, empathy and the idea of selling not telling.

Career opportunities

The purchasing and supply chain profession has undergone major transformation over the last few years; it provides an excellent and exciting functional area for graduates who want to have a real impact. The right skill-set required is obviously reflected in the salary offered by an organisation, but all graduates entering the purchasing profession will need to prove themselves by showing a willingness to learn, independent thinking and determination. Salaries have risen rapidly over the last 10 years and a graduate trainee moving into purchasing and supply management could expect a promotion within 12 to 18 months, plus a starting salary of between £18,000 and £20,000.

The annual CIPS/Croner Reward purchasing and supply salary survey 2006 highlighted that junior management roles are showing an average salary of £25,500. This soon progresses to £32,500 for middle management, jumping to £56,000 for senior management and £66,000 at director level. At the time of the survey, the senior management salary levels outstripped many other professions, including IT, finance, HR, sales and marketing.

For further information contact the Chartered Institute of Purchasing & Supply on 01780 756 777, email info@cips.org or visit www.cips.org