Purchasing? Procurement? Strategic Sourcing? Supply Management? As the profession continues to evolve, old labels tend to come unstuck and peel away.
Getting Out of the Back Room
It started in the 1990s. Like drab caterpillars transforming into magnificent butterflies, purchasing professionals left their brown cardigans draped over the backs of their uncomfortable chairs in dimly-lit back offices and emerged, blinking, into the bright hub of the business.
No longer a service department, we were suddenly business partners. We talked strategically rather than tactically, proactively seeking to understand what the organisation was trying to accomplish, and find ways to contribute to its competitive advantage.
But, what did we decide to call ourselves?
Almost thirty years later, the only thing that has really been agreed upon is to leave the term “purchasing” behind. Perhaps if there was one global, all-encompassing professional body, the decision would have been made for us, but unfortunately this isn’t the case.
In the U.S., the National Association of Purchasing Agents (founded 1915) changed its name to the National Association of Purchasing Management (1968). It finally became the Institute for Supply Management (ISM) in 2002.
In the UK, CIPS changed its name from the Chartered Institute of Purchasing and Supply to The Chartered Institute of Procurement and Supply as late as 2014.
Across private businesses and government departments there’s a bewildering array of labels and job titles. This, of course, makes the standardisation of job descriptions and salary levels unnecessarily difficult.
Getting Out of the Box
I’m half-way through ISM’s “Fundamentals of Purchasing” guided learning (e-learning) course under the tutelage of Dr Wade C. Ferguson, President, Erv Lewis Associates, LLC. The course begins with some of ISM’s definitions around Supply Management and what the profession actually entails. It led to one of the class (me, actually) asking Wade’s opinion on the term procurement versus supply management.
His reply: “Changing definitions represent the evolution that the profession has gone through. In the company I worked at for over 30 years, we changed our name from “purchasing” to “procurement”, but it didn’t really change anything, as procurement is basically a subset of supply management.
“It’s a necessary and important subset, but if you want to be more encompassing, we prefer the term ‘supply management’. It underscores the recognised breadth of the modern supply chain and the need for coordination and value optimisation.”
Wade argued that the reason for dropping the old label was a profession-wide effort to, “Get out of the box. Out of the myopic purchasing view, to understand what the organisation is really trying to accomplish. When we can do that, we’re perceived as being strategic, not just a tactical cost centre.”
Pigeon-Holed by Labels?
This argument makes sense when you look at ISM’s definition of responsibilities under the Supply Management umbrella:
- Strategic sourcing
- Materials management
- Disposition/investment recovery
- Product/service development
- Manufacturing supervision.
If you wanted to keep things in separate boxes, then I’d estimate that roughly half of the components above belong to Procurement, while the other half belong to Supply Chain.
This separation of responsibility might work in a company where, say, you have a Chief Procurement Officer working closely with a Chief Supply Chain Officer. But why not combine those two roles into one? It’s all interconnected, and it makes sense. And Head of Supply Management could be the label that encompasses the whole picture.
Here’s the thing – maybe, just maybe, the narrowing effect of “Procurement” labels is one of the contributing factors holding Chief Procurement Officers back from that coveted spot at the boardroom table.
Even for those CPOs out there who do in fact have responsibility for the supply chain as well. It’s possible that their very title means that this vast part of their role isn’t actually recognised by the people that matter.
Don’t Abandon the Progress We’ve Made
In a previous article, Procurious founder Tania Seary also called upon the profession to stop worrying about what we call ourselves:
“In my opinion, re-branding procurement is a distraction, especially since we’ve made enormous progress in educating businesses about what procurement does. Rather than having to re-educate the C-Suite about what a Commercial Director or Chief Relationship Officer does, that energy could be better spent actually showing people what we have and can achieve.
In line with why we created Procurious to begin with, we know that the procurement and supply chain profession has struggled to overcome outdated stereotypes, so it’s time we join forces to become collectively valued. By empowering future procurement leaders, we can change the face of the profession from the inside out, rather than worrying about the label itself.”
Things Certain to Change Again
“The only constant in life is change.”
…just as the only quote that the Greek philosopher Heraclitus will be remembered for is the one above.
The Procurement/Supply Management/Whatever-you-want-to-call-it profession has changed so much in the past thirty years that there’s no reason why it shouldn’t change again. By the time we’ve settled our current labels debate, it may already be outdated.