Academic journal article Journal of Purchasing & Materials Management

Developing a Procurement Training Program

Academic journal article Journal of Purchasing & Materials Management

Developing a Procurement Training Program

Article excerpt

Developing A Procurement Training Program

The changes that have occurred in procurement operations in recent years require that procurement personnel update existing skills and develop new perspectives and abilities if they are to contribute effectively to the success of their organizations. This article discusses a program developed and implemented by the procurement unit at a Fortune 50 manufacturing firm. The program enabled the firm to determine the training and development needs for every position within the organization, for the purpose of preparing its personnel to deal successfully with the challenges of the next three to five years. This experience may be of value to other purchasing organizations because the program's design is independent of the procurement activity's structure, size, and industry. Today, procurement personnel are faced with an increasing number of challenges not encountered by their colleagues in earlier years.[1] Internally, new activities require new skills, capabilities, and levels of knowledge. For instance, the rationalization of suppliers, which invariably results in a reduction of the supplier base, demands skills and capabilities for analyzing suppliers' abilities to meet current and future needs of the firm. Single-sourcing decisions and the subsequent development of long-term relationships require a new way of managing the supplier relationship. Supplier certification and product quality monitoring, an increasingly frequent concern of purchasing, necessitates management skills in areas not typically needed in the past.

The external business environment also contributes to the changing purchasing scene. Increased competition, in both domestic and foreign markets, is producing increased pressures on procurement to reduce costs while increasing or at least maintaining quality and technological leadership. Additionally, increased international buying requires an understanding of currencies and the impact of exchange rate fluctuations on long-term purchases--an understanding not needed when working with domestic suppliers.

This functional evolution requires that procurement personnel update and acquire new skills, knowledge, and capabilities. The means by which this can be accomplished goes beyond the typical purchasing training program.[2]

In addition, some procurement departments are faced with another interesting challenge. As young graduates coming out of school join the purchasing and materials management ranks, many departments find themselves with two different types of personnel. On the one hand, older people with limited formal education but extensive purchasing experience and capabilities in specialized fields compose one group. On the other hand, a second group consists of younger personnel who typically have bachelors or master degrees that provide a broad academic preparation for business, but who have limited practical procurement experience. To help meet the challenges confronting the firm, the experienced personnel need to update their capabilities and conceptual know-how, while the younger personnel need to develop an understanding of current operating practices and learn how to apply the products of their academic experience to these operations.

Responding to these challenges, the Procurement Group of a Fortune 50 manufacturer successfully implemented a program that enabled the unit to determine the training needs for each position in the procurement function. The objective of the program is to prepare procurement personnel for the challenges of the next three to five years. Because its design is independent of the procurement activity's structure, size, and industry, this program may serve as a useful illustrative case study for other purchasing organizations facing similar challenges.

THE APPROACH

Given the group's extensive professional development needs, the firm's procurement management team decided that a formalized development and training program was needed for all personnel--from the managers to the clerks and secretaries in the unit. …

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