30 March 2009

The economic downturn has taken many professionals by surprise. Larry Beard examines how they can adapt themselves and raise their profile in the new situation

Think back to the days of the 'winter of discontent' - if you can.

Many purchasing professionals have not experienced a deep recession before in their working life. Having spent their career in a stable and prosperous economic climate, they now require different skills and a new mindset to be successful in this changed environment.

The adage "It's not what you know, but who you know" no longer rings true - at the moment both are equally important. I have always encouraged my buyers to develop their internal and external networks - they are an invaluable source of information and opportunities.

Networks can be developed online through social networking sites such as LinkedIn or physically by attending branch events or conferences.

Experience is also invaluable and longer-serving staff are perfectly placed to coach and mentor less-experienced buyers. Not only can they offer "pearls of wisdom" from having been there and done it, but can help nurture new skills by giving practical examples.

Information is crucial. Do you have enough awareness and visibility into your spend and supply base? Fortunately this information is abundantly available through news alerts, price indices, the internet, colleagues, peers, forums - the list goes on. But buyers must not only process this data; they must be able to get into the detail of it to deliver real business benefit.

This approach becomes more apparent when we talk about company financials. Traditionally we have satisfied ourselves with reports from Dun & Bradstreet or audited accounts, but now a company's debts or loans, or their payment performance, have greater relevance. Buyers have to be able to access these statistics and understand their implications.

Now is the time for buyers to be bullish, take a risk and step out of their comfort zone. As the word 'deflation' becomes more widely used, purchasers should be setting clear expectations with their suppliers. If we know our commodities and contracts, we know which ones we can push hard. Of course there are two sides to every story, and while the recession creates opportunities it also increases risk. Buyers need to identify their high-risk suppliers and be able to spot the signs of potential failure of those who may be too proud to admit it, and take appropriate action. Would quicker or consistent payment make a difference?

Fostering close supplier relationships will be a bedrock of support for those high-risk suppliers in the coming months, because for many survival is the target and they will seek customers they can trust.

A recent newspaper article cited "procurement manager" as one of the most "recession-proof" roles. Buyers at all levels should see the recession as an opportunity to demonstrate their individual and collective value, raise their profile and show we can make a difference to the bottom line.

If you would like to contribute an article to this page please contact paul.snell@supplymanagement.com

Key points • Develop your internal and external networks.

• Identify and support your high-risk suppliers.

• Know your company's statistics and understand their implications.

Larry Beard Director of purchasing and supply chain management, Severn Trent Wate

SMmar2009