Purchasing 101

By popular demand (Hurray someones reading my blog!) I am going to talk a bit more about Purchasing - the joys and the pitfalls.

I clearly remember my first purchasing job. You see I am not as old as I feel I can still remember things. I worked for a window and door manufacturer in Detroit, Michigan as an assistant buyer. This was my first job out of the shop. Before I move on I must say that it was hard for me to leave the shop floor where I ran a bridgeport and did various milling/sawing/fabrication jobs. The people I worked with were my friends and moving into management unfortunately disolved those relationships. I was viewed as "Management" now. Kind of sad really and I tried to talk to some of my buddies but things never worked out and we didn't hang out any more. Such is life I guess.

As an assistant buyer I was asked, more like told, to do everything while the purchasing manager did little to nothing. I did all the buying and he did all of the "over the shoulder watching". Little did I know that this was really preparing me for what I would get when I was the Purchasing Manager and I had company ownership looking over my shoulder. I think now that this is where he learned to watch me. It was because he was being watched. It was the trickle down affect or is it effect? Hmmm. And all that time I just thought that he was a jerk. See "jerk" - not something worse - still a family blog. Whew, that took a lot to come up with such a nice term like that.

This particular window and door manufacturer was owned by a very wealthy man. The one thing I never understood was this: I would call up a supplier and reorder an item that we buy all the time. EVERYTIME I would call in an order we would be on credit hold. My vendor refused to ship to us until we paid for past due invoices. This happened with nearly every supplier we had. Get this: I would walk over to the next building (yes they owned two buildings next to each other) that housed accounting and I would talk to the assistant accountant about paying for our bills. He gets up and walks over to a huge walk in vault. I mean this thing had a 7 foot swinging door, large combination lock and steel construction. Outside of a bank, I had never seen anything like it. Inside this vault were shelves and shelves of checks. Each one already made payable to whomever the company owed money too and sitting in alphabetical order all ready to be signed. The assistant accountant pulled the few checks out that were made out to this particular supplier and then we walked in to see the accountant. He looks at the three checks and asks me, "Do we have to pay all of them or just the oldest?" I still have wrinkles on my face today from the cringed face I made at him that day. What was this guy thinking? He ends up very reluctantly ( and with a deep sigh) signing these three checks and tells me he will mail them out today. Upon leaving his office the assistant tells me that it isn't that we don't have the money it's that we don't like to pay our bills. This still makes me laugh. Now, talk about taking away a purchasing persons power. How do you negotiate with a current or new supplier when they all know that you don't pay your bills? Not much leverage there. It also shows how much more than just buying many buyers do. Think of the time wasted having to do this so often. Anyway, this brings me to my next point.

Why is it that sales can land a new customer that doesn't pay their bills and yet everyone celebrates the new customer? Flip it and why is it that purchasing gets chewed out everytime an invoice has to be paid. Hmmm, lets make a deal - you stop selling - I'll stop buying and we'll stop manufacturing. That doesn't make much sense. I've actually seen this many times. Sales will land a new customer, ownership or upper management will ask "How big?", the reply will come and everyone is excited. Thats great and the way it should be but why doesn't it fall on the salesmans head when that new customer doesn't pay their bills. It isn't hard to land the poor customers. It's hard to land the good ones. You have to work for the good ones. Someone in accounting gets hacked for it. If they could, they would try to pin yet this too on purchasing if they could find a way. Ok, so I'm a bit sensitive about my fellow buyers. I guess the thing I don't understand is why sales people are so untouchable in the companies that I have worked for?

The Art of Negotiation:
Ah yes, one of my favorite pastimes. Purchasing remains my favorite job ever. Even now that I own toolinghouse I still do the buying. I have this radical new idea of actually paying my bills on time too. You'd be surprised on how much more bargaining power and negotiation power I have with suppliers because I pay my bills. It's a great job, fun, challenging and yet rewarding too. But how does one negotiate?

Well there is give and take or in the case of my first employer as written about above, there is screaming, yelling and fighting. I was trained by my first employer to yell, scream and even curse at my suppliers. This is how these guys did business. I fell for it after all it worked, the louder you screamed at some poor cat on the other end of the line, the more they did for you. I did refuse to curse at my suppliers like my bosses did because I thought that was uncalled for. Sad to say that I carried this yelling/screaming mentality on to my new job after I left that company. I wasn't as bad as these other guys but I did learn the way of yelling at suppliers. In my new job as assistant purchasing agent for a humidification manufacturer I sometimes negotiated very loudly. Just to let you in on soemthing here, this is not who I am. I do not work that way, it was just what I saw my bosses doing everyday and I fell right into doing the same. Thats the role I began playing at work. Outside of work I was me. At work I was the Evil Buyer. Remind you of any monster movies from the past about two doctors, one named Hyde? Very sad actually. Guess thats why they say be careful what you do in front of your children. Afterall if I was impressionable at this age, what would a child be like? But it does testify to the pressure that purchasing people feel everyday. Yes, other people in companies have alot of pressure too. I know and I agree. But I am sticking with topic here so lets continue.

One day, early on in my employment at this new company we were running low on a particular special washer that we used millions and millions of every year. They are small and cheap and we use so many that it was absolutely unforgiveable to run out of them and shut down our production lines. For this reason I had a blanket order with our supplier for these washers and they were very late in shipping them to me. I was on the phone twice daily with the rep from our supplier trying to get an answer on where our washers were. With people sticking their head in my office door every second asking the same question about the whereabouts of "their" washers, I became flustered and I once again called the rep. He told me that he had screwed up and that he had pulled the order and that it was still laying on his desk and that he had done nothing with it. It would be at least another three weeks before we would have any washers. Out of frustration, I raised my voice and out of further frustration I, for the first time ever, cursed at this man. Even as the words came out I knew it was wrong. Again, this is not who I am and it was embarassing and uncomfortable. I felt cornered and at a loss to solve the situation and I regressed to doing what my old bosses did to get things done. After a few seconds of eerie silence, the rep calmly told me to call the manufacturer directly and that he would step aside. I'll never forget that and even though it is not who I am and though I have never spoken like that since he probably remembers me as "that guy". It shows you the frustration we as buyers face. Many employers think that we are sitting around sipping coffee and spending money like it is water. A good buyer cares so much for their company, their role in their position that these things happen. It has the potential to change you if you let it. Actually, I've never told anyone this story before because I am ashamed of how I acted. I use it for illustration purposes only to show how much pressure is actually on a buyer. It is NOT all coffee and window shopping.

I've had bosses come in yelling and screaming about why I bought this thing or that thing and when I tell them that Bob from Sales wanted it, he relaxes and says "oh ok then."

I've had bosses come in asking why we bought so much of this or that and when I tell them that their brother the production manager just doubled production on a particular line he says "oh ok then."

Its the life of a buyer. Like it or not it is just the way it is. Actually its part of the game we play as buyers. It's part of the art. Did you get a great deal on your last couch and loveseat like I did? Maybe, but did you get them to throw in the matching pair of bookends at no cost? Perhaps not. But I did. The art of negotiation. And, hurrah, I didn't yell, scream or curse at anyone to get it done. : )

Today, being on the sales side of the desk, I love running into good buyers. I can spot them in a second. All you have to look for is that serious face, the open eyes, the alert attitude and the fact that you know when they are talking to you they are giving you their full attention but they still have a million other things on their mind. It's ok, I was there. I know.