Procurement Department’s Rising Position in Companies

Over time, more systematic units and departments began to emerge as businesses grew up, and with mass production, the sales, marketing and finance departments gained significant importance.

In order to facilitate these functions and departments, procurement departments began operating over time, influenced by industrial revolutions.

Purchasing departments were a support department just for starters. Procurement processes were being carried out for goods and services by so-called ‘mubaayaci’. Rather than strategic moves, daily activities were common. Achieving the cheapest purchase was the primary goal.

Purchasing is now a more important factor. Experts (managers) have control of massive purchasing budgets. Procurement managers co-ordinate the purchasing management of your business, supply chain, product and service production, along with many other functions.

It helps negotiate the contracts necessary for these functions and helps your business achieve its strategic goals. In other words, activities that used to be considered solely the purchase of products (procurement) now involve larger sizes.

There is complex process management that takes place from the procurement of the raw material to the production and then to the delivery of the product/service to the consumer. The managers in this process are specialists, engineers or managers within purchasing departments. This way, it is possible to earn while purchasing. Therefore, an awareness has developed for the purchasing department. Behind this awareness is, of course, each of the internal and external dynamics also has an impact. Dominant roles in external dynamics may be an example.

Global competition, currency fluctuations, competitor strategies, market uncertainties, commodity price changes; external dynamics. Internal dynamics it can be thought of as production, quality, r&d, top management and logistics. As production accelerates, well-managed costs and expenses need to be managed. The structuring of the supply chain sets the agenda for the whole business, and the strategic contribution of the procurement department becomes evident at this point.

The Inevitable Consequence of Industry 4.0

Of course, the improvement of production standards and production companies played a role in the success of the recruitment department. In the field of industry, the subsequent innovations make purchasing more necessary. One of the inevitable outcomes of Industry 4.0 is the purchasing engineer. This recently emerged concept represents people who have technical skills and abilities. Modern supply chain management is helping to develop the technical competence and skills of purchasing engineers.

About the Selection and Importance of Supplier Network

The rise of interactive marketing brings about many changes and innovations in marketing. It is essential for the continuity of your existing products. Your network of suppliers should be expanded to increase the availability of the products you need. In order to achieve this increase and ensure a smooth management of the procurement network, the procurement department must also manage the process.

It is the area of work of procurement managers to ensure that success is sustainable, the system operates in an integrated manner, a regular purchasing strategy is connected with a compatible supplier network. The importance of supplier selection brings along sensitivity. An example of Apple's Jabil regarding incorrect supplier selection and the importance of supplier selection can be provided.

Apple is receiving complaints about a supplier named Jabil who believes China has poor working conditions. Following this situation, Apple issued warning statements arguing that its rights are protected. The Jabil factory reports were presented and poor working conditions were specified. Apple is not harmed, but that doesn’t mean it won’t happen. Damage to the company’s reputation is inevitable in such cases. The role of supplier selection is thus understood.

Features of Procurement Specialists/Managers

The purchasing department is quite extensive and demands not only comprehensive purchasing specialists and managers, but also procurement managers. First of all, it's important to be mobile with the state of the art! The emerging digital war between organizations demands mobility and technology. You are expected to either have a purchasing specialist quickly adapting to the change, or become one yourself. For complex problems, simple solutions must be produced and they must be pragmatic.

It is necessary to follow all buying trends such as e-procurement, e-procurement, hedging and forward buying in a good manner. Global markets should be closely monitored.