An Oversimplification… But True!

Today’s guest blogger is my colleague James Baehr, a Senior Advisor at Greybeard Advisors LLC, and a contributing author of the highly-endorsed book “Next Level Supply Management Excellence: Your Straight to the Bottom Line® Roadmap.”

When it’s all said and done companies do two basic things – they sell (products and/or services) and to sell, they need to buy. An oversimplification?  Not really. Whether a company is comprised of thousands of employees, or only one, it’s very likely that to sell a good or service the company needs to buy something?  Even the company of one.

Take for example an independent contractor who provides a consulting service. The Consultant needs some basic tools – pen (the classic line), paper, smartphone, computer … and so on. All these items need to be purchased so that the business of one can deliver its service. And, as for the company of thousands – well, it can’t exist without buying “things” – buildings, parts, insurance, etc.

Companies, of one … or thousands, will commit incredible effort to sell their product (or service) but does the same level of effort going into buying what the business needs so that it can sell?  In the past few years there have been numerous reports written by high profile entities telling us that the role of Purchasing is on the rise. It’s evolving and now called Procurement. The person in charge is called the Chief Procurement Officer (or CPO). And, this CPO reports to a top executive. And, all is good.

But is it?  Do companies very big and very small make the same level of commitment to buying as they do to selling?  They should—because to effectively and efficiently sell you also need to effectively and efficiently buy. An oversimplification – not really!  When companies start making the same level of commitment to buying as they do to selling then, and only then, will Procurement have arrived.

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