A Short Blogging Break

I'm "Mr. Mom-ming" it while my better half is at a convention for the next several days. Then, we have a new temp starting on Tuesday. So you won't be seeing a blog post here for a little while (unless I get reeeeeaaaaaly inspired, which is possible).

In the absence of new content here, it may be a good time to visit our archive of purchasing articles for your fill of educational content for purchasing professionals.

Talk to you soon...

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Cost Savings Reports

I hope that you have enjoyed the article "Cost Savings Reports: Why Some Are Weak."

There is one point I really wanted to expand on in the article - Problem #2, Using Poor Quantity Estimates.

I know that many purchasers out there will say "I got the quantity estimates from my internal customer. So it's not my fault if they overestimated and we don't realize the amount of savings we expected to realize!"

I disagree.

If you are reporting cost savings estimates, you are (and should be) held accountable for the accuracy of those estimates. Don't try to pass the buck. Executives don't care to hear about other people's roles in why you didn't do a good job. Haven't you watched The Apprentice?!?!?!

So, when given a quantity estimate by an internal customer, ask some questions, such as:

1. How "set in stone" are these quantity estimates?

2. What are the assumptions that were made in developing the quantity estimates?

3. What are all of the circumstances that could arise that could change the quantity estimates?

4. What are the likelihoods of each of those circumstances changing (high, medium, low)?

5. Instead of reporting a single number for our quantity estimates, if we had to report a extremely certain quantity range, what would the range be?

Sometimes, it may be safer to report that you'll achieve cost savings of between $250,000 and $600,000 than to report that you'll save $500,000.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Another SPSM Certification Evangelist

The biggest reward in my job is when students express how delighted they are with their experience in the SPSM Certification Program. So I am pleased that I can share with you this letter I recently received from a newly-certified SPSM:



So I'd like to personally and publicly say "thank you" to Kathleen and wish her the best of luck in her career. By this letter, it is obvious that she's committed to continuous self-improvement and to delivering results to her employer. I know she'll be very successful as an SPSM.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Search Engine Added To This Blog!

Thanks to a comment in an old post on Supply Excellence, I have been prodded to add a search engine to the Purchasing Certification Blog.

A great idea, I admit. I wish I would have thought of that without having to have it suggested, but it's there nonetheless over on the right-hand side under the links.

If you find it helpful, please let me know!

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

My Definition of Standard Cost

A subscriber to PurchTips responded to this week's article "Spend Analysis: Whatcha Looking For?" and asked for my definition of "standard cost" as used in the article. Here it is...

A standard cost is an estimated cost assigned to each purchased material or item by the accounting department of an organization. Standard cost accounting is used primarily by manufacturing organizations for the purpose of budgeting at the beginning of each fiscal year.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Why Purchasing Must Communicate Its Value

I just read this blog entry entitled "YOU'RE EITHER MAKING SOMETHING OR YOU'RE SELLING SOMETHING!" that every purchasing professional should check out.

This blog, written by an individual who has started and owned many companies, reflects a common perception among CEO's. And the heart of it sheds some valuable light on how purchasing is perceived and why purchasing is a target for downsizing.

So what do you think of this guy's perception of employees who don't make or sell something?

Is he missing the point that some employees - like purchasing professionals - can have a big, positive impact on profits?

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Spend Analysis

I hope that you have enjoyed the article "Spend Analysis: Whatcha Looking For?"

If you didn't notice, there is also an accompanying video podcast which you can download for free from our Purchasing & Supply Management Podcast Series page or watch on YouTube.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Expert Purchasing Management Reviewed

Michael Lamoureux over at the Sourcing Innovation Blog recently posted a two-part review of our new online course "Expert Purchasing Management."

You can read his reviews here and here.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Hiring A Purchasing-Friendly CFO

I got an interesting request for help from a student today.

This purchasing supervisor said that he would be given the opportunity to interview two candidates for the company's CFO position. But he wanted to know what the heck you ask candidates like these!

While I've never interviewed anyone for a CFO position, I'm not without my ideas! I suggested that he ask these four questions at a minimum:

1. What are your feelings about the purchasing function in an organization?

2. How do you define good purchasing department performance?

3. In what ways have you seen a purchasing department improve a company's financial performance?

4. Can you tell me about a time that you had to consider changes to the amount of resources to be made available to a purchasing department, either from an investment perspective or a reduction perspective?

I think that these questions can quickly help an interviewer flesh out whether the candidate truly understands purchasing or is clueless; whether the candidate feels that purchasing is a cost consuming department vs. a profit improving department; and whether the candidate is more likely to downsize purchasing or invest in new supply chain technology and talent.

What would you ask a CFO candidate?

Click the Comment link below to post your reply.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Top Three Purchasing Issues

He's at it again...

Michael Lamoureux over at the Sourcing Innovation blog is rounding up us spend management/supply management blogger types to do another cross-blog series. This time, the theme is "The Top Three" - each blogger will rant about his/her favorite three issues in supply chain management and Michael will bring them all together.

A brilliant idea, I think!

So, I'm going to get right into it with my top three, all based around the concept of continuous improvement - something every purchasing leader should be dedicated to. This will be short and sweet as there have just been an unbelieveable amount of things going on here at Next Level Purchasing headquarters.

#3 - Measurements: Any successful continuous improvement initiative really needs to revolve around measurements. You simply have to keep score to know how good or bad you are, what your goals are, how close you are to your goals, etc. Measurements go a long way towards demonstrating your value to senior management.

#2 - Benchmarking: Measurements alone are great for focusing on and motivating goal-based performance improvements. But it helps to know if your goals are reasonable as well as challenging. One way of doing this is to examine what other organizations are doing. Someone may think that their on-time supplier delivery rate of 80% is great until they find out that another company in their industrial park is achieving 94% on-time delivery.

#1 - Skills: You cannot implement improvements - internally or externally - without having a skilled purchasing team. Note that I didn't say an experienced purchasing team. Someone who has been in the purchasing department for 25 years just isn't going to be a great contributor unless s/he is educated in the latest purchasing best practices. Skilled purchasing professionals know how to develop a strategy for the culture of their organization, understand what tactics to utilize to deliver results, and are able to execute at a high level of expertise and intelligence and with a high degree of confidence only attained through proper professional development.

Phew! It is a relief to get this post done as I know Michael has wanted to wrap this up for some time now.

Back to the grindstone...

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

Purchasing Salaries in Canada

As I thought would happen when we released the article "Your Purchasing Salary: Is It Fair? ", we've gotten several responses essentially saying "You list US salaries, but what about purchasing salaries in MY country?"

With purchasers from over 50 countries around the world enrolled in the SPSM Certification Program, we are certainly challenged in tracking purchasing salaries for each country. But, with Canada so geographically, technologically, and economically close, it is worth it for us to monitor salaries there.

Based on information from the Labor Market Information agency of Canada, the average hourly wage of Purchasing Managers in the Toronto area is $25.95, and for Purchasing Agents, it's $20.55.

Those statistics indicate that it is much more financially beneficial to be a purchaser in the US than in Canada.

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

New Purchasing Management Course!

One of the many, Many, MANY reasons I've been quiet on this blog lately is that we've been working very hard to finish up our latest purchasing course. And it is finally done and ready for you!

Moments ago, we just uploaded the Web page describing our new course "Expert Purchasing Management!" So you are the first to know...we won't even be doing a press release for a few more days!

I'm so excited about it, I'll paste the first few paragraphs of the description right here...

Are you a purchasing manager who worries about balancing the many demands of your leadership role? You're not alone. Today's companies are expecting more than ever from their purchasing managers. And today's environment is confronting purchasing managers with more challenges than ever.

Between being accountable for measurable results, pleasing internal customers, and ensuring that your purchasing staff improves its productivity, you may feel it is impossible to do a good job. After all, it isn't easy keeping up with evolving best practices, new technologies, and changing markets.
But fortunately, there is a way for you to learn how to meet and exceed today's high standards for purchasing management excellence. Our highly personal and interactive online course “Expert Purchasing Management” will teach you everything you need to know to lead your purchasing department to new levels of success!

You will learn how to report purchasing performance metrics to senior management, plus…

• 4 things about the purchasing environment that you need to assess right away
• How to develop a purchasing customer service survey
• Tips for improving purchasing staff productivity
• The secrets for involving internal customers and establishing a successful Purchasing Advisory Board
• The most important things to consider when naming your purchasing department
• 5 common purchasing department structures and their advantages and disadvantages
• How to prioritize commodities that the purchasing department will source
• 4 indicators that you should look for to identify non-traditional areas for potential savings
• 3 different ways to assign buyer responsibilities
• The types of various purchasing profit center models and the dangers of choosing the wrong one
• How to staff your purchasing department with the right people
• How to create a Purchasing Dashboard
• How to set the perfect purchasing department goals
• How to develop purchasing policies and procedures
• How to establish a standard sourcing process
• Strategies for using templates to improve productivity and reduce problems
• Best practices for making recommendations to senior management
• 3 ways to reduce the tactical purchasing activity under your management
• 5 steps to take to ensure that you don't do buyers' work
• How to improve compliance with purchasing initiatives
• The essentials of launching a purchasing department Web site
• How to assess the available purchasing technology by watching video demonstrations of leading software from Ariba and Zycus
• 10 keys to eSourcing success

To be one of the first people to enroll in this class, go to http://www.NextLevelPurchasing.com/registration.html

Now, if I can get a few more of these gargantuan projects done, I'll be back to my regular blogging pace soon. Thanks for your patience!

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com

SPSM Approved For GI Bill Education Benefits

We just received notification yesterday that Next Level Purchasing was approved under the GI Bill. This means that qualified veterans may be reimbursed for their fees paid for taking the SPSM Exam.

This was a pretty extensive application process that took place over several months. We submitted something like a 4"-thick binder supporting our case!

To Your Career,
Charles Dominick, SPSM
President
Next Level Purchasing, Inc.
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM Certification Online At
http://www.NextLevelPurchasing.com