Expert The three main sins of the purchasing manager

In this article, we will examine all three sins that most often destroy the procurement system from the inside out.
Let's start in order.

Sin #1. Laziness

Work on the principle of "and so will go"

In fact, this is not just about laziness.
It's a much deeper question.

Laziness fails in order not to place an order to the supplier and leave the company without goods.
Laziness manifests itself in another:

• Is the buyer looking for new suppliers?
• Is negotiating a reduction in prices;
• review the terms of cooperation;
• Expanding the supplier base.

Often these processes They are not mandatory. Neither from the point of view of the buyer, nor, oddly enough, from the point of view of the owner.

Therefore, in many companies, buyers have been working with the same supplier base for years, almost without expanding it.

Why is this happening?

Search for new suppliers, preparation for negotiations and the negotiations themselves require huge amount of energy.
Not in sprint format, but in marathon format.

Where do we get this energy in today’s energy deficit?

Many people choose to work in purchasing rather than selling.
Salespeople need a sea of energy every day: calls, persuasion, negotiations, rejections.
The work of the buyer, on the contrary, allows you to save personal energy by simply ensuring the availability of goods in the warehouse.

Over time, the habit of “banal” work is formed.
And a lot of buyers are simple. They don’t want to waste energy on improvements.Because:

• And that's how it works.
• profit is available;
• The system doesn't break.

What kind of incentive would an employee have to spend a lot of energy searching and negotiating if:

• He's on a payroll;
• Are KPIs focused on results, not efficiency?

The answer is simple. none.

What it turns out for the company

• Purchase prices are far from optimal
• Marginal profit is not the limit of dreams
• The owners earn less than they could.

Is it possible to cure it?

Good news. cure.
Bad - you need to be treated complex with other sins.

Simply “kicking” the buyer will not work.
You will hear dozens of reasons why:

• Current suppliers are the best.
• prices are the lowest;
• The quality is perfect.

How to diagnose the problem

Ask yourself simple questions:

• How long have you been working with current suppliers?
• How many new suppliers are there this year?
• And in the past?
• How many existing suppliers have permanent discounts over the past year?

Sin #2. Low qualifications

The Dunning-Kruger effect in procurement

A very subtle moment.
Who is responsible for the qualifications of buyers – the employees themselves or the employer?

What qualifications are we talking about?

Standard tasks of the buyer:

• place an application with the supplier;
• ensure delivery;
• to arrange document circulation;
• conduct documents in the accounting system.

This can be taught to any adult in a couple of days.

The present qualification of the buyer affects only two trials:

1. Reducing company costs
2. Assortment management

Assortment management

To properly manage the range, you need either:

• extensive experience in a particular field;
• Or "God's talent."
• Or (which is easier and more reliable) Correct reports and technologies 1C or some other software.

If in 1C one button is done ABC-analysis and auto-order works,
You can hire almost any buyer and just show which buttons to press.

Here. 100% responsibility of the employer.

Reducing costs is the main problem

But with reduced costs, it is more difficult.

Small business. There are simply no necessary competencies:

• No companies,
• No buyers,
• No bosses.

Individual companies were able to build really effective systems for reducing purchase prices.
Everyone else is overpaying suppliers 7-12%without even realizing it.

Calculate how much money. personally You're overpaying now.

Why it's not cured by "learning inside"

Employers can’t train employees because they don’t have the skills.
And to hope that the buyer himself will go to study is naive.

But there's another problem.

Neither employees nor employers are able to objectively assess the qualifications of the buyer to reduce costs.

How the Dunning-Kruger Effect Works

Typical picture:

1. The buyer tried to lower the price.
2. Got a 2-5% discount.
3. I couldn't do it.
4. Decided he was the "god of procurement"
5. I believe there are no better conditions.

That's it. The Dunning-Kruger effect. Cognitive distortion in which a person with low qualifications is unaware of their mistakes.

And then I come and find out what I could get. 12-17%Sometimes from the same provider.

The saddest thing is that such buyers infect the whole company with confidence.
And soon everyone is convinced that:

• Best prices;
• Genius buyers;
• Nothing to improve.

What can I do?

1. Come on. free diagnostics (30-60 minutes online)
2. To train employees on an online course
   Advanced technologies to reduce purchase prices and negotiations with complex suppliers
3. Order in-depth analysis of the procurement systemTo:

See the bottlenecks;

understand the risks;

Get a step-by-step improvement plan.

Sin 3. Corruption

Corruption meets more often.
It causes not only direct but also indirect damage to the business.

All the attention of such an employee is focused on:

• The system worked;
• The money went;
• We got kickbacks;
• And don't get caught.

We are no longer talking about cost reduction.

How does it start?

Sometimes by accident.
Sometimes consciously.

The second option is the most dangerous:
man Targetedly selecting purchasesTo sit on the streams of money.

What to do about it.

In short, monitorNot people.

Minimum set of tools:

1. Metric analysis
   Marginality, margin, cost, food cost, supplier base
2. KPI efficiencynot for the result
3. Regular schedules and reports
4. Deep spot checks
   The manager himself understands why this particular supplier was chosen.
5. Selection of key suppliers through tender
   Suitable for 99% of businesses – from manufacturing to HORECA and construction

If these tools do not exist, business not protected from corruption.

And it is important to remember that not only buyers can steal, but also any employees who influence the selection of contractors, decisions and volume distribution.

Expert contact:

Filatov Vyacheslav

Business coach, business consultant for procurement management
Telephone.: +7953-762-8786
Telegram: @Procurement27
Mail: office@filatov-consult.ru