Purchasing Managers?

[jasonabryan]

How important is it to have a purchasing manager?

When is the right time to hire a purchasing manager. I work for an owner that for some reason doesn't believe having a purchasing manager is going to make him any money. He thinks the money spent on a purchase manager's salary and associated costs would be more than what that position could save him or make for him.

Here is the crazy thing about this, we are constantly running into situations where purchasing gets out of control but nothing happens. I am what you might call a controller / database developer / manager / estimator /, I do just about everything when it comes to the books. We currently operate a wholesale supply with a 7000 sqft inventory, an installation company, a restoration company, and have a HVAC company that just started in January. Combined we do upwards of 8 million a year. Our purchasing power is significant to say the least, between our wholesale company and the restoration company we will average a 200-400k a month just in purchases for jobs. This doesn't include the vendors we hire for restoration company.

In my opinion the money we would save could be huge. With somebody solely dedicated to getting the best price, managing purchase orders, returns on product, managing what is taken from the warehouse for internal companies, and flat out theft.

Can anyone share any experiences that you might have had with your business, or suggest some ideas to help me convince him that it would be beneficial for all his companies.

[vangogh]

I don't have any experience with this, but I wanted to help keep your thread active.

The first thing I'd say is as frustrating as the situation is for you. just remember it's someone else's business and that person ultimately gets to make the decisions. Good or bad that's their right. That doesn't mean you can't help convince him to change his mind. Is there a way you can come up with some numbers to show your boss what he might save? My guess is you're going to need to prove it to him first, which I realize isn't easy.

If your boss is convinced hiring a purchasing manager will cost too much, he might be looking only at his cost. It's also possible sometime before you worked there he did have someone or he did work out the numbers and is now convinced it won't work. When you've approached him about this have you offered some idea of how much he might save?

You might also try asking more questions. Sometimes I find if you ask questions in an attempt to understand more, it makes the person you're asking have to think through their position. Sometimes in thinking things through they come to the realization you want them to.

In the end though, as frustrating as this might be, it is his business and he gets to make the decisions, good or bad. I encountered that with just about every place I ever worked and having to follow too many decisions I thought were bad decisions is one reason I decided to become the boss. Your frustration might be a sign you want to own the business one day instead of working for someone else in their business.

[Fulcrum]

I've dealt with a few purchasing managers and I hated every minute of trying to make a deal with them. First they tried to beat me up on price, then completion, then delivery, then terms, followed by a unilateral decision, by them, to pay when they felt like it (PM also handled invoice payment). I find that they only care about initial price with no foresight to long term costs related to maintenance and unscheduled breakdowns. I walked away from one, told another to use every available metric before making a decision (polite way of saying get your head out of your ...), and shut down a critical operation after withholding delivery due to lack of payment.

Then again, my experience may be the opposite of what actually happens.

[jasonabryan]

Fulcrum,

i completely understand where your coming from, I have been there myself. What i'm striving for is to bring someone in that just handles our purchases, PO's, job costs, warehouse, etc. As it is now, it seems like it's a free for all around here. There is only so much one person can do (Yes, i mean me). Between all of the companies thee is no physical way i could manage that on top of all of my other responsibilities.