WSJ: Let's Hear it for the Corporate Buyer

Even though I think we would all rather be referred to as sourcing, supply management, Spend Management or supply chain professionals than as "corporate buyers", it's not everyday that our sector lands on the front pages of the Wall Street Journal. But that's precisely what happened this morning (registration and subscription required) when the well known business newspaper printed a story noting that "purchasing offices were once corporate backwaters, filled with people who didn't dream of advancing to the top rungs of their organizations. Many buyers saw themselves as industrial bureaucrats, filing purchase orders with the same short list of familiar, mostly nearby suppliers. When possible, they avoided the complex process of assessing potential new suppliers, especially those overseas.”

But my, the Journal notes, how things are changing. Today "top buyers today need different skills and often have higher aspirations. Sometimes they're engineers or others with operating experience that gives them more intimate knowledge of how their company's products are made … Alcoa Inc., International Business Machines Corp., and Sara Lee Corp. have all created chief purchasing officer positions, often reporting directly to the chief executive or chief operating officers." The article credits "today’s transformation" in part to "technologicial breakthroughs" a decade ago when “when companies began installing computer systems that record their every transaction." According to the story, "this often revealed startling weaknesses. For instance, many companies found that different divisions -- or even different offices down the hall from one another -- were sometimes paying different prices for the same product bought from outside suppliers."

Actually, I'd correct the authors that ERP systems which recorded transactions did little to reveal differences in prices. As we all know, spend analysis systems from providers such as Ariba, Emptoris, BIQ, Verticalnet, Analytics Inc., Zycus, SAS, Ketera, D&B, CVM, and many others led that charge more recently than ten years ago. But I'll forgive the Journal for this blunder, as they've done more than enough simply by calling attention to our corner of the business world.

Jason Busch

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