Now that you have made the hard choices management has required and reduced your staff and even though starts are slower than you remember them since you started there, why is it that it feels like every week you get farther behind? How is it that with so little going on, your department is showing signs of burning out? The last thing you want to deal with now is attrition. Every department will be feeling this crunch at some point during this housing cycle. Unfortunately for you, your time is now.
The problem is that even though sales are slow, purchasing isn’t. As a matter of fact, I would be willing to bet that your department has done more negotiating, more contract revisions and more vendor reallocation in the last nine months than you have in any nine month stretch since hurricane Katrina. And to make the situation even more challenging, there is little chance you are going to get the go ahead to add staff at this point. So how do you keep morale up and productivity peaked when there aren’t enough hours in the day. Relax. That’s why they pay you the big bucks. Chances are, you are already doing some of the right things.
Beware of Whiplash- In a stressed environment; it is easy for a purchasing manager to put off completing routine tasks or to allow accuracy to slip a little. But bank on this, inefficiency will always come back to take four times the resources it would have taken to get it right the first time. If you gloss over the budget review on new house starts, you can bet the variance report will flesh it out. If you loosen up on your negotiating documentation, invariably, that vendor will have legal issues or at the very least, an internal audit will pick that vendor to review. Keeping a clean house now will ensure that you are ready for the coming market correction when you will be even busier than you are now.
Put First Things First- Steven Covey coined this as one of his Seven Habits of Highly Effective People for good reason. If you focus your resources on the projects with the biggest payoff, you will bring the most value to the firm. The trick is defining “payoff.” With politics, interdepartmental demands, lack of information from above and priorities that seem to change daily as sales and architecture are in a frenzy to find the secret recipe to resuscitate sales, it is difficult to get a firm grip on what is top priority. It is easy to get caught up in dollars when looking at priorities through the purchasing lens. But keep in mind, the organizations goals should always chart the course for the goals of purchasing.
When it comes to which contracts to allocate department resources on, one of the easiest ways to get a perspective on negotiating priorities is to take a sampling of your direct costs for a cross section of plans. Then sum the costs by activity code and sort the totals from greatest to least. Using a quick Pareto chart points out the activities that make up the largest expenditures in the house. The simplified sample below gives you an idea of the outcome.
You can download this template in Excel 2007 here.
Regardless of how you ultimately choose to sort priorities, the important thing is that you use this new information. Take some time to get an idea of how much resource you currently have allocated to each project or task. How closely does that resource rationing equate to your priority list? Maybe it is time to reallocate. Just don’t forget to communicate your change in plans to your stakeholders.
Retool- At first blush, this sounds like a counterproductive proposal. How could you afford the time to improve your staff when they are already overtaxed. Two reasons rise to the surface. First, your staff has been chugging along for nine months to a year now looking over their shoulder for the pink slip. Investing in their skill set not only sends the message that you continue to have confidence in their future at the firm, but it allows them to get out of the routine if even only for an hour. Second, and most obvious is that the more trained your staff is, the more efficient you will work together. Don’t worry about busting the budget. Look for no cost, or low cost solutions such as:
• Recruit your staff member with the firmest grasp of one of your software products (enterprise, office products, or even html) and have them give a one hour tutorial covering a few new tasks that can be mastered. Remember to assign labs so you can gauge your teams mastery of the concepts.
• Invite two of you’re a-list suppliers to come in and give a thirty minute state of the company address.
• Check with your IT department. They may have online training tools you are not aware of.
• Share what you know. You achieved that position because you have what it takes. So identify some aspects of purchasing that you can share with your staff to empower them
• Make it a “best practices” sharing event. Individual staff members may be surprised at the level of ingenuity being exercised by their teammates.
• Conduct a local plant tour. Make it a long lunch and tour a supplier’s facilities.
Communicate, Communicate, Communicate- You are the manager. You have been appointed to steer the purchasing ship. Part of your responsibility is to keep in constant contact with your stakeholders. As their needs shift, it is imperative that you alter priorities before wasting energy on a cancelled project. In like manner, apprise other department heads frequently of your progress. You can prevent some of those uncomfortable assumptions by insisting on face time with sales, production, architecture and accounting department heads as often as possible.
As a final word of encouragement, you can and will make it through this downturn. Just brace yourself for the hill in front of you and align every effort with the organization’s goals.
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