In an increasingly competitive business environment, manufacturing companies have sought to increase the level of analytical skills, negotiating expertise, and relationship-building abilities in their purchasing departments over the last few years, and 2016 will be no exception. Duke Manufacturing, a maker of restaurant equipment based in the Midwest, is a case in point.
âFirst and foremost, you must build a relationship with the supplier,â says Bret Williams, purchasing manager at St. Louis, Mo.-based Duke, which employs about six category managers in its purchasing department, each of which is responsible for a particular area. The company buys everything from steel, wood, and plastics to controls, thermostats, and other industrial parts. Finding the newest member of its purchasing department in 2015 was a challenge, Williams says, putting relationship-building at the top of his hiring wish list.
âWe work together, as a partner [with our suppliers],â explains Williams. â[We are paid] to make sure weâre getting the best quality, on time at the best price. But itâs not all about price. We have to work with suppliers when their costs go up. It doesnât do us any good to hammer them on price and have them out of business in two years.â
Reg Nelson, director of global procurement for candy-maker Jelly Belly, agrees. Nelson says his firm is fortunate to have had a full crew in the purchasing department over the last few years following a drought in the 2009-2011 timeframe. Negotiating skills are a key advantage when it comes to arranging long-term contracts, which Nelson says helps both parties share the burden of market uncertainty.
In its annual Purchasing and Manufacturing Survey of mid-sized companies, buying group Prime Advantage identified analytical, negotiating, and relationship-building skills as top priorities for purchasing departments in 2015 and into 2016. The group released the findings late in 2015, and Vice President Mike McDonald emphasized their importance from a collaborative perspective heading into the New Year.
McDonald said it was no surprise the three skills scored high on purchasingâs requirement list.
âIf youâre on the procurement side of the business, thatâs hammered into you from day one. But today there is more of a collaborative mindset,â he says, pointing to a focus on total cost of ownership rather than just price when it comes to supply negotiations. âIt used to be that purchase price variance was the main emphasis [in negotiations], but now that is a component of [total cost of ownership].â
McDonald adds that some companies are âtaking the bull by the hornsâ and reaching out to local schools and colleges to offer classes and internships focused on a range of skills needed to build a quality workforce for the future. Developing a company culture focused on learning, retaining employees, and helping them grow in their profession also figure in as top concerns going forward.
âIt was encouraging that these are the skills and issues that bubbled up,â McDonald says.