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Week of 24 June 2024: Procurement--Knowledge of the Use and Need

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Quick--what is your image of your purchasing team? I'll bet it is them sitting in their offices with their nose stuck in a computer or a document. Or perhaps on the phone.

Back in the days when I worked in a mill, I spent a good deal of time wandering around the mill. It didn't make any difference what my job was, I wandered around the mill in order to understand it from a detailed and overarching perspective. This made me better at my job, whether it be engineering, maintenance, technical, power house manager, whatever.

If you or your team provides a service to the mill, and procurement certainly falls within this category, it is your job, indeed duty, to know the departments you service and what they need from you. It is not enough for the departments to tell you what you need, visit them in their work setting and learn in their home space what they need from you.

A number of years ago, I met a gentleman who was a doctor blade salesperson. He called on a mill that was in his area. He went to the machine. There he was told the purchasing agent want to see him before he left. Visiting the purchasing agent, he was chewed out for not having a certain doctor blade on hand when the mill needed it. Being a sharp salesperson, he had a solution which was for the mill to buy the new caddy of blades his company was now selling. He, the salesperson, assured the purchasing agent they would never run out of doctor blades again--he would make sure this blade caddy would always be stocked with the blades the mill used. He laughed as he told this story, for he said the caddy full of blades came to about $100,000 and contained blades the mill changed only every few years. The purchasing agent didn't know his business and cost the mill some serious money.

In another case, I was an advisor to a young company that was making seal strips for vacuum sections in press rolls. They had built their business by offering quick turnaround. Give them an order today and they would get it out no later than tomorrow. I asked them what the extra charge was for this quick service. They stared at me and told me they charged the same as they did for regular orders. I explained to them that likely that roll that needed the quick service had been out of the machine for months, and it was the mill's negligence that caused this panic buying. I told them to triple the price for quick service and all that would happen would be that they made more money. It took them a couple of months to get up the nerve to try this, but when they did, they discovered I was correct.

A wandering purchasing agent should observe when a roll is pulled from the machine and ask the maintenance department if they will be needing any wear parts for it.

There are endless examples like this that procurement can influence. And this is a better way for the purchasing department to save the mill money than just beating up the suppliers, who, if that is your practice, will always win in the end.

Be safe and we will talk next week.


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