At the NCMA conference this week, I had the pleasure of speaking with a lot of interesting people with many different roles.
At one point, I spoke to a senior manager for a government contractor. He was at the conference primarily to learn some tricks-of-the-trade for working the contractual process with his clients (the government).
I asked him about purchasing in his company, specifically with regard to skill development. He said nonchalantly that his company really didn’t do much in terms of purchasing training and he wasn’t concerned. They were a “small company” and didn’t spend much, relatively speaking.
I asked him some questions and learned that his company spends about $20 million per year on goods and services. I then asked if the company could save 5% of that – in other words, increasing profit by $1 million – would the owners care.
He took my card.
Sometimes that is the approach you have to take when communicating the value of purchasing internally – if you could have $x more in profit, would that matter to the owners/investors/stockholders?
What else can a reasonable person say?
Saving 5% may be tough in an inflationary market if you have already squeezed out cost savings in the past few years. But if the company hasn’t been historically “concerned” with purchasing…there’s likely lots of low hanging fruit.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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