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Purchasing and Supply Interacts with Internal Customers
Current estimations indicate that a majority of North American organizations spend anywhere from 50 to 60 percent of sales for direct materials purchased from local, regional, and global suppliers. As a result, it’s no surprise that senior management is looking directly at purchasing and supply management to (1) source and add value-producing suppliers, and (2) build and maintain shareholder value. A.T. Kearney’s Catalyst, a special supplement to Chemical Week, reports, "Although some old-style companies still write procurement off as a bureaucratic backwater, leaders are realizing that their total spend accounts for 50 percent of total revenue and represents a substantial opportunity for building and sustaining long-term value." Of course, the task of elevating purchasing and supply from a day-to-day administrative role to a strategic and value creating role requires a commitment from senior management.
Approaching Internal Customers with the Message of Your Team’s Merit
For the sake of discussion, let’s break down the methods of establishing contact with internal customers by grouping communication into informal and formal arenas, with each method providing avenues to better promote and make known the merits of purchasing and supply.
Using Tools to Project Your Message
Chances are that the internal customer is already bombarded with reports. Hence, any reports originating from purchasing and supply need to be easy to read and offer the opportunity to manage by exception.
An internal customer might want to see the total spend by the department per commodity, per supplier. He or she might want to see the total number of requisitions purchasing and supply has processed for him or her.
He or she might want to see the on-time delivery performance of supplier(s).
Thomas J. Bassett
Thomas J. Bassett is the corporate purchasing manager at International Total Services, Inc., which provides personnel services to the major airlines and personnel for commercial security. He is responsible for the development and administration of company purchasing policy. A majority of his time is spent negotiating national supply agreements for the benefit of 329 different user sites. Mr. Bassett has worked in the purchasing and supply management field for 12 years and, in various organizations, has held positions of inventory replenishment buyer, international buyer-planner, and corporate purchasing agent.
- AT Kearney, CATALYST, special supplement to Chemical Week, Summer 1998
- Cullinan-Lewis, C. "Union Camp’s Radical Redesign of Purchasing," Purchasing, February 13, 1997
- Duffy, R.J., "The Future of Purchasing & Supply: Where We are Headed," Purchasing Today®, NAPM, May 1998
- Fearon, H.E. and Leenders, M.R., "Executive Summary of Purchasing’s Organizational Roles and Responsibilities," Center for Advanced Purchasing Studies, 1996
- Figgie, H.E., Cutting Costs, An Executive’s Guide to Increase Profits, American Management Association, 1988
- McWhorter, K.M., "When Purchasers are Educators," NAPM Insights, NAPM, October 1993
- Miller, R. "Internal Customers: A Maintenance Checkup," Purchasing Today®, October 1997
- Murphy, E.E., "Cards Are Key Part of Re-engineering Strategies for Procurement Cards," Purchasing, October 22, 1998
- O’Reily, P.E. "Ten Ways to Sell Purchasing Within Your Organization," 83rd Annual International Purchasing Conference Proceedings, NAPM, 1998
- Young, J. and Varble, D., "Purchasing’s Performance as Seen by its Internal Customers: a Study in a Service Organization," International Journal of Purchasing and Materials Management, Summer 1997
FOR FURTHER READING
- Burke, N., "How to Successfully Relate," Purchasing Today®, October 1997
- Carter, J.R. and Narasimhan, R., "Purchasing and Material Management’s Role in Total Quality Management and Customer Satisfaction," Center for Advanced Purchasing Studies, 1993
- Gill, P. and Ross, J., "What We Do to Relate to the Final Customer," Purchasing Today®, October 1997
- Rasmussen, M., Zinn, H., Dunlap, J., and Stookey, B., "The Internal Customer Wish List," Purchasing Today®, October 1997
- Scheuing, E.E., "Achieving Excellence: Creating Customer Passion in Your Purchasing Organization," 84th Annual International Purchasing Conference Proceedings, NAPM, 1999
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