Free PDF Common Sense Purchasing: Hard Knock Lessons Learned From a Purchasing Pro, by Tom DePaoli
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Common Sense Purchasing: Hard Knock Lessons Learned From a Purchasing Pro, by Tom DePaoli
Free PDF Common Sense Purchasing: Hard Knock Lessons Learned From a Purchasing Pro, by Tom DePaoli
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Common Sense Purchasing is a no holds barred practical guide to purchasing and negotiations success. If you don't like consultants, buzzwords and theory this book is for you. Straight forward and to the point you will not be able to put it down until you have finished the purchasing journey. This book is a must for all purchasing personnel.
- Sales Rank: #624021 in eBooks
- Published on: 2013-02-18
- Released on: 2013-02-18
- Format: Kindle eBook
Review
Just an outstanding purchasing field manual! Most consultants and academic folks will hate this book! They can't stand low cost common sense techniques. The book has many simple common sense approaches to purchasing. Unfortunately common sense is all too rare in purchasing. At our company we don't even want to hire purchasing folks who are certified. We have to spend too much time deprogramming them! The style is eclectic because the author wanted to emulate the chaos of a typical purchasing day. The key point is that relationship building with suppliers is essential.
From the Author
When I am reading the books that may end up on our Endorsed Publications list (in the Procurement Library), I often find that they are missing a certain... something? Now I know what it is - cartoon illustrations! All joking aside, I am now in a position to recommend a book that contains solid procurement advice and pictures. Read all the way to the end of this interview to see my favorite from the book.
Common Sense Purchasing is structured around 100 lessons, the kind of lessons that are easy to agree with, but not always so easy to consistently put into practice. My personal favorites are:
- #3: Plan or Perish. Make sure you have a strategy first. Not technology first.
- #12: Do your homework with suppliers and industries.
- #21: Pick the right metrics [for procurement performance]. The right ones.
Following each lesson are examples and other ideas backing up why the lesson is important and how to execute its advice.
If you need an additional reason to buy and read this book, it is the price. As of this interview, Common Sense Purchasing is available new for purchase on Amazon for $9.99. This is a significantly lower price than many of the more academic books out there. The price and the content are both accessible and down to earth.
Buyers Meeting Point interviewed the author, Dr. Tom, about Common Sense Purchasing.
BMP: In the introduction of the book you say that you have made "just about every darn mistake one can make in purchasing". We are glad that we are not alone in that. Which mistake was your 'favorite; which taught you the most important lesson?
Dr. T: One of my favorite mistakes is when we went through a disciplined and arduous supplier selection process. The selection process was done by a cross functional team. All the numbers were favorable and the supplier had good references and was eager to get started. The total cost of ownership savings were well over $1,000,000. We did all our homework and were very confident of our decision. The new supplier promised to provide a supplier representative on site for 20-30 hours per week. We even had a celebration. The supplier representative started and I thought that things were going well. Unfortunately our maintenance personnel just could not get along with the representative and conflicts arose. It was more a personality issue rather than competence. Luckily the supplier had another representative available who replaced the initial representative and was well liked by our internal customers. The lesson learned was that once again, relationships are not only critical, but "king" in supply management. We added to our supplier selection process an interview (performance based) of any on-site representatives by our internal customers, like maintenance, and a reference check and discussion with other customers about the on-site representative. Also don't celebrate prematurely.
Lesson #1: It's about relationships first and foremost.
BMP: How does the rising role of social media/networking relate to the need to emphasize the value of relationships?
Dr. T: Social media/networking improves or enhances the value of relationships. They are an excellent tool(s) not only for developing deeper relationships but getting to know people in the supply chain on a personal basis. This is an asset and people appreciate attempts to build better personal relationships. It is the Internet version of playing golf with someone. You get to know a lot about an individual when you play eighteen holes of golf with them. Obviously social media is not that intense but it does help build relationships. Bottom line it helps build trust, especially internally which is a key for managing change. Some argue that we should not build these type if personal relationships with a supplier or internal customers but I disagree. More often than not, this type of relationship will help especially in a crisis. Besides what is the alternative? Being constantly adversarial adds no value. The watch out is that you cannot let personal relationships sway your judgment when major decisions have to be made. Being honest with a supplier, when they are deselected or disqualified, is always the best option. Most experienced purchasing professionals can remain objective and not let personal relationships derail their judgment. They can usually avoid what I call Supplier Stockholm Syndrome.
Lesson #6: Ruthlessly rationalize suppliers first and then don't back off.
BMP: As the need to manage risk increases in organizations, many companies are moving away from supplier rationalization - or rather away from single sourcing. Does your recognition of risk as one of the "bottleneck materials strategies" (lesson #19, bullet 4) fully address that or do you think supplier rationalization as a strategy should be reconsidered altogether?
Dr. T: There is no standard answer for this. You need to have a different supplier strategy based on the particular service or material that you need and the risk of supply interruption. The more critical or strategic the material, the more that you have to make a sourcing decision based on risk. This may include multiple suppliers, alternate materials, or backup suppliers. Sole sourcing decisions can have significant dollar savings but an interruption of the supply chain can carry great risk and cost. The purchasing professional must have multiple sourcing strategies to deal with risk. This is especially relevant today where many companies have international suppliers who can deliver at much lower costs. However, many of these countries are at risk not only from a political or stability aspect, but natural disasters.
Lesson #12: Do your homework with suppliers and industries.
BMP: I love the fact that you advocate not being intimidated by bullying stakeholders/internal customers, "Purchasing is not an unctuous service organization at the beck and whim of internal customers" (p. 11). What advice would you give for managing or minimizing the inevitable fall out?
Dr. T: My advice here is to always lead with the facts and stay professional. Make sure you have a good supplier evaluation process in place with great metrics. Bullying stakeholders often focus on one incident and over dramatize the single event and impact. Maintenance people often focus on one incident of late delivery of a part. This is a standard bullying exaggeration procedure. When shown that the supplier evaluation data reveals a 99% plus on time delivery of thousands of parts, the drama is often defused. My other advice here is to publish supplier performance metrics (visibility) so that everyone can see how they are doing.
BMP: You use terms such as procurement, purchasing, buying, sourcing, etc. in your book. Do each of the terms used have specific meaning to you or do you use them interchangeably? I ask because of the growing association between purchasing and tactical buying v. procurement and more strategic activity (for instance).
Dr. T: I use them interchangeably in the book. I categorize these terms as skill sets that all purchasing professionals must have. Purchasing professionals need to switch gears in their approach based on the customer needs. They may have to quickly be tactical, strategic or bureaucratic based on what the customer wants. What every purchasing professional should ask themselves at the end of their day is "What did I do today to help move the business ahead?"
BMP: Nearly 10 years after your book was originally published, if you were to write lesson #101, what would it be?
Dr. T: Do not give up on relationship building. It does take time, effort and stamina. But the rewards are huge. The first test of a relationship is very important, so make sure you do your very best to maintain and improve the trust.
From the Inside Flap
Common Sense Purchasing reveals the real life lessons learned from a purchasing professional who has seen every purchasing job level from junior buyer to vice president. Purchasing is the art of relationships and trust building that requires deft handling. Dr. Tom DePaoli has led numerous efforts to re-engineer purchasing and has successfully negotiated international supply agreements. He provides poignant insights into what really works in purchasing and separates the theory that doesn't work from the practical aspects that were very successful in his career. Dr. Tom uses many of his original sayings and hard knock lessons to help purchasing professionals get it right.
"Purchasing is the art of building relationships. It is not about negotiations, transactions, industry knowledge, market knowledge, know-how or technology. It is all about building strong relationships and gaining the trust of suppliers, customers, and colleagues. Nothing else even comes close in importance for successful purchasing as does the creation of strong relationships." - Dr. Tom
Most helpful customer reviews
15 of 17 people found the following review helpful.
What this book is REALLY about!
By W. Fitch
I bought this book, in no small part, because of the rave reviews that it's gotten on this site. Now that I've spent half of my day thoroughly reading this 76 page gem, I'm kind of astounded by what's been written about it. In spite of my rating, I don't consider it to be a bad book. If you're the manager of a purchasing department within a large manufacturing firm looking to reengineer your operations, I recommend that you read it. However, if you're looking for sound advice on general purchasing practices, look elsewhere.
This book seems to have been thrown together fairly quickly. It contains numerous typos, and poorly drawn cartoons that add little to it. Nonetheless, the author does dispense some practical advice on modernizing a purchasing organization, and how to sell the plan to affected individuals. He principally focuses on computer automation, developing procurement card programs, and developing "strategic relationships" with suppliers. This last notion refers to his belief that strong business relationships should be forged with important suppliers to get them more fully involved in meeting the company's needs (automatic inventory replenishment and the like). On the whole, the book seems to be more about modern (late 90's theory) operations management than about purchasing, but at least the points that the author does make seem sound. Unfortunately, the book is too short to be of much use as anything but a checklist for people trying to reengineer organizations. At least it's good for that.
As far as the personal stories gleaned from years of purchasing experience are concerned, I could only find two, which collectively took up a whopping half a page. I'm not suggesting that the author didn't rely on his extensive experience to write the book, but he principally just states the "facts" as he sees them, and provides precious few examples to illustrate his points. More vexing still, is that the man probably could have taught his readers a great deal about purchasing, but chose to write about other things instead. I've little doubt that there are people out there who can greatly benefit from this book, but they probably number in the thousands, which is probably why it's called "Common Sense Purchasing" and not "Common Sense Modernization of a Purchasing Organization".
8 of 8 people found the following review helpful.
An Outstanding Supply Chain Book-Must Read
By John Lowe
Just an outstanding purchasing field manual! Most consultants and academic folks will hate this book! They can't stand low cost common sense techniques. The book has many simple common sense approaches to purchasing. Unfortunately common sense is all too rare in purchasing. At our company we don't even want to hire purchasing folks who are certified. We have to spend too much time deprogramming them! The style is eclectic because the author wanted to emulate the chaos of a typical purchasing day. Many bureaucrats can't get this book and just mindlessly pan it. The key point is that relationship building with suppliers is essential. There is no roadmap for this effort other than hard work and getting folks to trust each other.
I personally experienced Dr. Tom's one day workshop on Reengineering Purchasing which was the best experience of my purchasing career bar none. Most of the high priced junk that consultants sell today is smoke and mirrors like spend analysis, reverse on line auctions, portals etc. Bottom line Dr. Tom hits it on the head, "It's about getting world class suppliers and building strong relationships." This is where the quantum leaps are. Many companies are enamored with technology and lose sight of the strategy. Any purchasing dummy can learn tactics and be a fire fighter. The strategists are rare but their gains can be enormous. Dr. Tom is a true and dynamic strategic thinker whose ideas are timeless and right on. Buy this book and use it. Make everyone in your department read it and discuss it.
8 of 10 people found the following review helpful.
Common Sense Purchasing: Hard Knock Lessons Learned From a Purchasing Pro
By T. Jacobs
I perform the purchasing function for a small business. I thought this book would be helpful as an instruction manual for improving how our company makes purchases. It was not. The book was geared toward large companies with large purchasing departments. There was little to no instruction on how to actually improve how you make purchases, mostly how to tell staff how to follow company wide purchasing guidelines. I would not recommend this book for small business owners or those without large purchasing departments.
See all 19 customer reviews...
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