President's Article "Serving our Members with purpose and passion..." By George F. Nagy, C.P.M., President NAPM-Orange County, Inc. Affiliated with the Institute of Supply Management

A call from an old friend or a winning raffle ticket is a wonderful surprise. As a purchasing professional however I strongly dislike surprises. That goes for good surprises as well as bad ones. We live in an environment of forecasting and planning. Predicting not only what will happen but when it will happen. When we are surprised we need to ask ourselves what we did not do or did not do well.

Even if the surprise is a good one, like a lower price, the question that should come to mind is, why? What changed that made the price lower, have I been paying too much all this time? Did I do my homework when I first bought this item? Did I negotiate correctly? What did I leave on the table?

Much of the information we base our buying decisions on comes to us from external sources. When given the assignment to buy a product or a service, we rely on the information we have accumulated over time to effectively take the next step. Which suppliers to call, establishing price conditions, reviewing specification or statements of work, developing bid criteria, setting up the right purchasing agreement. Then there are the performance criteria and measurements to think about. What about stocking programs? Assessing the risk strategies and designing the best logistical solutions are not to be overlooked.

As we develop in our careers, we do many of these steps automatically, without giving it much thought because they have become an integral part of our everyday purchasing activity. Yet, if we are not constantly aware of what is happening in our business environment we can get into major trouble. I urge you to be especially vigilant in today’s dynamic economic situation. Many of the traditional supply bases are undergoing dramatic changes while others may experience very subtle changes that are barely perceptible. Be alert and do not be surprised. Gauge the economic health of your sources, distributors and manufacturers alike.

Stay abreast of all the mergers and acquisitions. Talk to your suppliers, the outside sales representatives, as well as the inside sales people, determine if they are comfortable in their job and happy with what is going on in their organizations. Make sure they are comfortable talking to you, that you have a good relationship.

Are the manufacturer’s facilities being consolidated, moving offshore, are they reengineering their products? Will the new specification meet your needs? Are there any products or processes that may be discontinued that would have a severe impact on your company’s ability to do business? Have there been any major policy changes in the supplier’s company? Have they changed any aspects of how they are doing business? Will this be detrimental to you, or give you additional advantages? What is their financial health? These are just some of the questions you should be asking.

There is no secret to this process. It is the result of good planning and communication. Don’t be surprised, talk to your internal and external customers. Find out what their needs are, what is coming down the pipeline. What will you need from the marketplace to insure your success and then make sure it will be there when you need it.

All of this will add value to you as a purchasing professional and one of the main asset managers of your company.

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