Motivating the Purchasing Professional

The purchasing function has evolved from a tactical supplier of the parts needed for production to a strategic player in the production of goods and services. The growth of strategic alliances, electronic data interchange (EDI), and supply chain management have been discussed in depth in the literature. However, an important element of all the programs and technologies with which purchasing is now involved - one that has not been discussed - is who is going to manage and carry out these initiatives? The key issue is not only what skills purchasing professionals will need to make this functional transition - but more important, how does a firm ensure that people with the skills needed for today are motivated to use those skills, and also learn the new skills they will need in the near future? This article builds and tests a conceptual model of two specific motivators to acquire and use purchasing skills: compensation systems and performance measurement systems. The model draws on skills that have been identified as important in the purchasing literature, as well as specific theories from the field of organizational behavior. A NEW KNOWLEDGE BASE IS REQUIRED The purchasing profession has moved from its traditional "buyer orientation" to a "supply base management orientation," involving the following changes:[1] * Buyers are becoming supply managers, insuring the flow of specified material from the supplier, and are becoming an integral part of the team that supplies the final product to the end customer. * Supply managers create and manage change. * EDI and information technology systems are assuming an increasingly significant role in purchasing by eliminating many of the time-consuming steps involved in traditional information flows. * Sourcing decisions are made increasingly by cross-functional teams. Other factors that will affect the purchasing function in the future are early supplier involvement in product design (ESI), global sourcing, supply chain management, strategic alliances, increased outsourcing, and standard quality assessment systems such as ISO 9000. These trends have direct implications for the knowledge base required for the purchasing professional. According to researchers Kolchin and Giunipero, three main skill areas are important to the sourcing function: 1. Business skills such as market analysis, negotiating with partners, effectively managing internal and external relationships, global sourcing development, effectively managing change, and planning and organizational skills 2. Interpersonal skills, including risk taking, written and oral communication, conflict resolution, influence and persuasion, group dynamics, leadership, problem solving, and international and cultural awareness 3. Technical skills such as cost analysis, product knowledge, computer literacy, total quality management (TQM), and government regulations The same study also identified a knowledge base that purchasing professionals will need. The major themes are quality, cost, and supplier management. Changes in the general business environment are also affecting the purchasing function. Increased environmental awareness is affecting customers' decisions as well as government regulations. Supply managers will tend to have a deeper set of responsibilities because of flattened organizational structures - and more breadth stemming from the need to manage the entire supply chain. Finally, new forms of organizations such as virtual corporations will shift the focus of supply management from products to core competencies.[2] SKILL ACQUISITION AND USE Knowing which skills are needed by an organization is only the first step in getting employees to actually use those skills. Selection and training programs can help a firm hire or develop the necessary skill sets. But, clearly, these programs do not ensure the actual use of the skills by the individual. …