Purchasing and procurement in everyday life at home and in business
By Logan Fransman
Grocery shopping is a terribly boring chore, but one that is essential for anyone, especially families. We cannot live on takeaways alone. We need to buy, acquire, purchase and sometimes we like to kid and say…’procure some milk, bacon and eggs’. Well, even though your daily, weekly or monthly domestic grocery shopping habit is boring, it actually mirrors what happens in companies, large and small in the purchasing and procurement departments. In both instances, it involves supply chains and logistics.
We sit at home, round the kitchen table and decide what we will eat in the coming week, what ingredients we need for that, as well as what snacks, drinks and other supplies we may need for the house. Are we expecting visitors, guests, or a gaggle of children to be as hungry as a swarm of locusts, if so, our grocery buying needs will change and need to be adapted. The list is made, special offers in newspapers are checked and we anticipate approximately how much the shopping trip will cost. It all sounds rather boring, but actually what we do when it comes to grocery shopping is a lot like what purchasing and procurement professionals do in organisations.
These professionals are essential to any organisation, as they have a direct impact on a company’s bottom line: cost and sales. They initiate the process and product improvements as well as supplier relationship management. Very much in the same way that people have preferred suppliers for their groceries, you use your rewards or loyalty cards to make savings on your purchases and you know which stores have fruit and veg that are of the best quality. Weighing up all these decisions when buying groceries or ‘raw’ materials or goods for an organisation adds value and always impacts operations. Organisations strive for better quality products while managing costs and this requires knowledge, experience and training in a professional environment.
Although cost savings is a major part of procurement, negotiations and contract management form integral elements of it. At home, no one teaches you about quality, negotiating or any of the other aspects involved with buying goods. However, we do look and compare costs and decide which supermarket will give us the best savings as well as the best quality we can get or afford. We learn as we go along and after a few years we have such a routine and know exactly what we want, need and where to get it at the right price that we don’t even give it a second thought.
Professionally when involved in purchasing and procurement you are potentially the most essential link in the whole supply chain of an organisation. Without goods arriving on time to be processed, manufactured or sold, the whole company grinds to a halt and perhaps, as a result, a whole industry does as well. So, being trained is essential as the training teaches you all the things you need to know as a purchasing and procurement officer. Making you a vital employee or department in any organisation, that directly influences the bottom line of the organisation. This important aspect not only affects revenue and sales, but also the relationship between the organisation and the supplier. Strong negotiation skills, supplier relationship management and agile supply chains are among the aspects successful purchasing and supply chain management professionals rely on. Time and availability are key factors of successful deals, as the materials need to be ready when required. Learning these purchasing and procurement skills will make an employee a lot more valuable to a company and enhance your resumé significantly. The Namibian German Centre for Logistics offers procurement and purchasing training courses that will not only benefit the individual but certainly the organisation they work for.