Could you share your experience in Marketing the Purchasing function within your company. What initiatives did you use and what results did you achieve?
Good Answers (1)
Wendi (Focht) J
Product Manager at Agilent Technologies
Best Answers in: Purchasing (1), Advertising (1), Positioning (1)
When I took over the role of the Marketing Procuement manager, I had a huge mess to clean up!
For years, our corporate procurement group had bullied employees into using one-size-fits-all vendors that offered low cost, global coordination and substandard service. These vendors had little to offer in the way of specialization, and were completely unable to meet the needs of our diverse business groups. Try marketing B2B technical products to lab scientists when your agency is a global consumer-brand house. Our marketing people wanted nothing to do with procurement, and my job was to market procurement to marketing!
Really, my role was to transform marketing purchasing for our division, so that it was relevant to my division. Honestly, the fact that my role existed to meet the needs of our division helped a lot. But given the arrogance, and ignorance, of the corporate group, I had a lot to do in the way of convincing our marketing teams that I was to be helpful and not hurtful. A big boon to me was that I understood our products and markets, having worked in the division, and could relate that to supplier requirements.
I set up a clear statement of intent - what I intended to do for them, and what I would need from them in order to do it. I travelled around to meet people face-to-face and explain to them how procuement involvement could support their objectives, and how they'd benefit from my services. I did presentations on procurement 101 - explaining the basics of procurement principles and the logic behind some of the conditions we had to set. This was the most valuable tool in my aresenal - no one ever thought to explain WHY these unnecessarily procuement rules had been put in place. The simple act of explaining the theory and applicability helped mollify some of the worst skeptics, once they understood there was some beneft to the company.
And of course, numbers. I provided illustrations of how we could assist the marketing function - contract negotiations, agreement management, requests for quotes/proposals, etc. And another very important aspect is that I made the marketing teams part of all this. I would not select a supplier without their input.
I could go on about this for hours.. it was a long and - in my opinion - successful transition. If you need any more info, just get in touch. Good luck!
More Answers (5)
Michel T
Strategic Advisor and Facilities Management Consultant
Best Answers in: Facilities Management (1)
Depends who you are marketing to and why. I have been on the receiving end of the purchasing group (i.e. I had a field job) and now as a consultant, I help field and line groups with procurement of services and outsourcing in conjunction with their procurement departments, if they have one.
What I tell people who are all in field or line roles is that the procurement department must support, not lead a service procurement initiative. Procurement departments usually sell themselves internally based on total spend and savings. Unfortunately, in my experience, this isn't a good starting position, since after you are done, the field staff have to deal with the result for the next 3-5 years. Saving $ is important in this economy in particular, but if that's your goal, you have to be more creative and not create an adversarial or poor service envirionment as a result. When your service suppliers fail, so do you.
So, your marketing to the field or line functions should be based on what you can do for service results (not just price) and long-term relationship management. Price is important, but you should start with the other two first. Develop approaches and methods for this in your procurement and you will easily be able to sell yourself to the other parts of your company who need services procured.
Links:
Charles D
President at Next Level Purchasing, Inc. and Owner, Next Level Purchasing, Inc.
Best Answers in: Purchasing (1)
Hi Tilda,
I've successfully marketed my purchasing departments in the past. The first step in marketing (whether it's a purchasing department, product, service, business, etc.) is to know what your customers or internal customers want.
For example, if you try to sell them on savings and the business unit managers aren't as interested in savings as they are product development speed, your marketing will fail. So you must begin by finding out what your internal customers' hot buttons are. Then, you can determine how purchasing can address those hot buttons and solve their problems and develop a communications plan around that.
Your communication plan should utilize both email communications (such as a newsletter) as well as regularly-scheduled meetings with business unit managers. Your communications should include goals, measurements of progress against those goals, and metrics demonstrating your improvement. After you've had some success, include some testimonials from business units that have been pleased with your work.
Something that worked in the culture of one of my previous employers but may not work in all employers is inspiring some competition between business units. For example, we had reports showing contract compliance by percentage of spend and ranked departments by that. Some business unit managers took a lot of pride in having better numbers than their counterparts!
The result in that situation was an incredible increase in contract compliance and savings from buying on-contract (I can't remember what the exact numbers were).
But the key is really knowing what your internal customers' hot buttons are and then building your message around that.
Purchasing function is something that everyone takes for granted. The best place to start marketing this function is first within the Finance Group. Get infront of the Controller, CFO, VP of Finance to show how purchasing is adding value by partnering with vendors, lower costs, etc
Let the CFO be your spokesperson for the rest of the company.
The other is working with Audit department and marketing it to inside and outside auditors.
See if you can product Analytics Charts of Cost savings, SOX compliance, etc.
Links:
Jon W. H
Hansen Consulting & Seminars Inc.
Best Answers in: Supply Chain Management (10), Government Policy (2), Small Business (2), Enterprise Software (2), Purchasing (1), Organizational Development (1), Planning (1), Career Management (1), Professional Networking (1), Computers and Software (1), Using LinkedIn (1)
In my conferences the question you are asking is the most prevalent amongst all audience members. It also touches on one of the primary reasons that 85% of all e-procurement/supply chain initiatives fail to achieve the expected results - ineffective communication and collaboration.
In fact I recently responded to two questions that were of a similar nature to yours, and for which I have provided the links below.
While the first two articles are specific as they relate to the organizational reporting hierarchy and the role of purchasing in a Merger and Acquistion scenario, the third link is to Part 4 of my critically acclaimed 7-Part Series Dangerous Supply Chain Myths.
The series, which reviews a report by industry heavyweights ISM, CAPS and AT Kearney and what they refer to as the "seven critical supply strategies" for success, highlights the inherent flaws with the traditional approaches and "best practice" strategies still employed by a number (albeit decreasing) of manstream players.
While Part 4 specifically delves into the critical elements of effective stakeholder collaboration, the entire series provides a solid overview of the factors that are reshaping supply practice today as well as for the next 10 years and beyond.
Procurement Insights reaches 300,000 syndicated subscribers each month worldwide, and is currently available in Chinese, Portuguese and Russian with new langauage versions being added in the near future.
Check out our new Sponsorship Program: http://procureinsights.wordpress.com/pi-sponsorship-opportunities/
Links:
Richard N
Corporate business development, Rationalization, Strategic Procurement, Industrialization, RichardNoren@lycos.com
To speak to many of the earlier answers I would suggets you to help your internal customers to make a value flow mapping of the entire procurement/supply set up, this so that you will ad value in terms of:
- challange your internal customers why they are doing things and hence be able to provide your value add when explaining for them how to make things less expensive through simplifying and the long term importance of re enginering the process. Many times you'll probably find out that the have no detailed procurement process flow in place integrated with the supplier so this will be a god time to rethink
- a value flow mapping of the procurement will be critical when approaching the supplier and setting up the provision structure at the end of the day (you'll look smart in both ends)
- a mapping will make it cristal clear for anyone involved when they should speak to whom and why, communication is surely important.
You'll find much more saving through this than to simply go for the obvious cost.