Purchasing and Negotiation Training

Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

The first half of my career was invested in the engineering and construction industry.  I graduated as a Civil Engineer and promptly went into business as a general contractor  self-performing several tradition sub trades .  This was followed by service as a Construction Manager (CM) for Fee Only.   All of this was very satisfying work, particularly the CM work which was far less price focused and more skills, services, and value oriented.  While I did not know it at the time, this experience was a real life laboratory for developing negotiation skills.  Since transitioning to the speaking, education and training industry, the experience and expertise gained in construction has accrued to the benefit of my construction industry clients.  Here is a partial list of construction industry client associations and individual companies. 

List of Construction Industry Clients

ASSOCIATIONS

• CFMA        Construction Financial Management Association
• SWRI          Sealant, Waterproofing and Restoration Institute
• CPCI           Canadian Precast Prestressed Concrete Institute ‎
• ICPI             Interlocking Concrete Pavement Institute
• NPCA          National Precast Concrete Association ‎
• MCPX         Manufactured Concrete Products Expo         ‎
• PCI               Precast/Prestressed Concrete Institute‎
• NUCA          National Utility Contractors Association
• SMACNA    Sheet Metal and Air Conditioning Contractors’ National ‎
• DASNY       Dormitory Authority of the State of New York ‎
• PCA             The Portland Cement Association
• PAMCANI  Plumbing and Mechanical Contractors Authority of Northern Illinois

COMPANIES

• ·         World of Concrete                            ‎
• ·         Fabcon                                               
• ·         Heidelberg Cement Group             ‎
• ·         Mack Industries                               
• ·         Energia Petrobras                           
• ·         Schlumberger                                  
• ·         Reynolds, Inc.                                 
• ·         Woodworkers Supply                     

One common thread that runs throughout the construction industry as concerns negotiation is that of price.  It is a price dominated industry.  In many bid situations, particularly publicly bid work, price is the only criterion.  Even though all units of government allow themselves the “out” of language such as “lowest responsible bidder”, it is very rare that a low bidder will be thrown out, largely due to the risk of inviting lawsuits that stop the project in its tracks and ultimately increasing the price once litigation is resolved.  Curiously, the end result is not much different in many private bid situations.  The focus on low price even is so strong, that even when the low bidder is notorious for its poor performance, the awarding authority (owner, general or sub-contractor) usually resorts to the tired tactic of trying to force competitors to chase the bad number of the irresponsible bidder because the “price was on the street”.  This means that the low price was carried in order to win the job.  We call this the Hot Potato tactic in negotiation. 

 In future posts, we will discuss specific situations and possible solutions, including partnering.

Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

I began doing education and training seminars  almost two decades ago.  It was a great proving ground for sharpening public speaking skills.  The American Management Association recruited me to write and deliver a Negotiation program.  It must have been good as it is still in use today at the seminar company which bought out the Kansas City subsidiary.

Since I was a purchasing expert, they also asked me to write and deliver a two day Purchasing program.  Since my style was energetic and zany , my resemblance to Mel Brooks was a daily comment which I took as a complement.  I liked to open with humor – not a joke, but more of a caricature.  One of my favorite opening gambits was to ask the groups, which ranged between 25 and 100, this spoof question, for which I demanded a show of hands.  “How many of you, when you were young, grew up dreaming that when you got big, you were going to be a purchasing manager?”  There were chuckles and guffaws.  On very rare occasions throughout the 2,000 or so seminars I have done, someone would raise their hand; I think they were spoofing me!

I would then go on to tell them that purchasing was the Rodney Dangerfield  of business.  Despite the fact that purchasing represents 90% of operations for a firm that earns 10%, and that purchasing is the most efficient and largest generator of profitability in all of business, “I tell ya we just get no respect.”

Then I would ask them how they got to purchasing.  Many were accounts payable clerks, some were engineering and technical types, a few had business backgrounds, and still others had done well at something else.  In all cases, their reward for their success was a sentence to purchasing. There was general resentment and disregard of purchasing because the internal customer did not understand or appreciate what value purchasing brought to business.  Attendees would volunteer that coworkers thought that anyone could do purchasing.  “What’s the big deal?  Just get three prices, do the bump and grind, and off in a cloud of smoke!”  Yeah, just like that.

I am proud and happy that the view of procurement has changed.  Leadership from within the profession is largely responsible for its own ringing successes.  One of the economic facts in our favor is what I previously contended, that purchasing is the most efficient and largest generator of profitability in all of business.  Let me prove it to you.

The table to the right shows the effect of both purchasing and sales on profitability.  There are two ways to increase profits; increase sales or decrease costs.   

Assume a business grosses one million per year.  It is scale-able for 10 million, 100 million, etc.  For simplicity the components of sales are Material and Labor shown in the first column.    In each of the next three columns, add those two together to compute the Total Cost.  Subtract the Total Cost from the Sales to compute the Profit in the bottom row.  The Effect line in the bottom row shows the impact on savings. 

The second column is the Base.  We will measure results compared to the Base.  The third column shows the effect of increasing sales by 10%.  Material and Labor rise a proportional 10% (neglecting minimal savings from leverage).  The net effect is a 10% increase in Profit. 

But now, look what happens when Costs are reduced by 10%.  Material and Labor drop by the proportional 10%.  The net effect is a whopping 90% increase in profitability!  There is no razzle-dazzle here.  It is straight forward economics and arithmetic. 

So the next time someone asks you about why you have a career in purchasing, tell them the straight forward truth.  You want to have the greatest impact on the organization’s profitability.  I am with you.

Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

An expert witness in purchasing serves others through the application of his specialized education, training, experience, and expertise.  While these qualities are necessary, they are not sufficient for execution of expert witness duties in purchasing.  

I have been fortunate to serve parties in litigation and arbitration and their attorneys in various capacities from simple advice, to rendering expert witness opinions in reports, depositions, and testimony.  The party can be either plaintiff or defendant because the facts dictate the expert’s opinion. 

Attorneys prefer that the expert witness be familiar with the legal process as it minimizes preparation and coaching time.   Nevertheless, they would rather have an unimpeachable expert who can be trained in testimony delivery.  That said, let us examine the practical considerations of an expert witness in purchasing.   

Most often, I am contacted by attorneys directly, the most fruitful source of my practice as an expert witness in purchasing.  Such contact results most often from web presence.  If one were to Google “expert witness in purchasing” , depending on the day, my name, my blog , or that of the American Purchasing Society , a strategic partner, come up in 7 of the top 10 organic listings.    

Referrals are the second best source as clients, lawyers, or organizations  recommend me based upon their experience.  As Martha Stewart  might say, “That is a good thing”.  A recommendation eliminates all doubts as to qualifications.   

Earlier this year, I acceded to requests from expert witness agencies  to sign with them.  This was not an easy decision as my experience with speakers bureaus  militated against enrollment with them.  However, expert witness agencies are far different from speakers bureaus in two significant points.

1. Speakers bureaus deduct from the speakers rate while expert witness agencies add a percentage to the expert’s fee
2. Speakers bureaus are glorified dating services attempting to match wide ranging criteria to skills while expert witness agencies are far more exclusive and precise

 A lawyer in search of an expert witness ideally wants someone whose testimony suits his or her argument.  This is not always possible.    In one case, it has happened that the initial assessment offered by the lawyer was not fully supported by the discovery  given to me for examination.  The case involved an insurance company defending a small retailer.  Without divulging specifics, the lawsuit involved oral representations of an interstate purchase and sale transaction.  My duty was to render an opinion as to the meaning and requirements of the Purchase Order and attendant warranties.   

Soon into my research, it became apparent that I could not provide the opinion favored by the lawyer so I called her.  She understood and thanked me for the service.  “At the very least”, she said, “I know how to proceed toward settlement.”  This advice saved the expense of a full scale written opinion, deposition, and testimony, all of which would have been detrimental. 

Recently, my services for a Plaintiff involved merely an opinion, no written report, deposition, or testimony required.  This was singular in my experience but the lawyer explained that this case involved a bankruptcy court and state laws permitting the attorney to summarize an expert’s opinion rather than present the report to the adversarial opponent.  Even though this claim ran into the millions, both parties exhibited sloppy purchase and sales practices.  As a consequence, three expert opinions were required, causation, damages, and purchasing practice.   

In this peculiar case, the need for my opinion was to neutralize an opinion rendered by an expert for the Defendant.  None the less, my opinion was the lynchpin because causation and damages would be moot if my opinion were not accepted as superior to the Defendant’s expert. 

In future posts, we’ll talk about do’s and don’ts of the report and testimony.

Robert Menard,
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

Editor’s note: This is Part Three of a three part series on the powerful and pervasive influence of W. Edwards Deming on business in general and purchasing in particular.  Click here for Part One and Click here for Part Two

We introduced Deming’s 14 Points of TQM in Part One.  Many practitioners of the purchasing profession have been surrounded by Deming’s theories and teachings in ways that may not be fully appreciated.  Following is commentary (in blue font) on the most significant impact of these points on purchasing practice today.   

8. Drive out fear, so that everyone may work effectively for the company.  Bullying by management, threats of termination, and other malfeasance creates a poor work environment where quality and productivity have no chance to flourish. 

9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.  This should be an obvious point but we still talk about ‘silos” or “stovepipes” in corporate organization structures.    

10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.  Another way of saying this is that management is the problem.  When things go bad, management often blames labor instead of examining its processes.

•Eliminate work standards (quotas) on the factory floor. Substitute leadership.

•Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.

Deming mentions leadership and management twice in this point.  The distinction is that leadership is to direction and vision as management is to execution and efficiency.

11. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality. These barriers are still stubbornly pervasive in business today.  Poorly trained supervisory talent defaults to riding herd instead of encouragement and showing the way. 

Click here for Bob’s book and CDs

12. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.  In one of his last interviews, Deming explained this point as creating an environment of worker empowerment, innovation, and freedom.  The difference between believers and non-believers on this point is obvious to the trained eye. 

13. Institute a vigorous program of education and self-improvement.  The application of this point to purchasing is crystal clear.  In researching for my first book in the late 1990s, I discovered that the average sales pro enjoys more education and training in one year than a purchasing pro receives in a career!  In the US, the Uniform Commercial Code specifically buyers to be educated and trained so this deficiency is still pronounced.

14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.  This speaks to the kaizen nature of constant improvement.

Robert Menard,
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

Editor’s note: This is Part Two of a three part series on the powerful and pervasive influence of W. Edwards Deming on business in general and purchasing in particular.  Click here for Part One  and here for Part Three 

We introduced Deming’s 14 Points of TQM in Part One.  Many practitioners of the purchasing profession have been surrounded by Deming’s theories and teachings in ways that may not be fully appreciated.  Following is commentary (in blue font) on the most significant impact of these points on purchasing practice today.   

1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.  Expressed in the vernacular of Total Cost of Ownership (TCO) , this point refers to striving to be the lowest TCO to our customers.  By extension, it compels us to cultivate lowest TCO suppliers. 

2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.  This is a formal statement of notice that the status quo will change and smart leadership will embrace the positive effects of TQM. As it has turned out, Deming could not have been more profoundly correct.

3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.  This is a subtle but powerful point that has made concepts like Just-In-Time (JIT) possible.  Extensive inspection presumes poor quality.  With JIT, quality is so high that millions of expensive inventory and storage space can be eliminated, thereby reducing TCO. 

4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.  THIS IS THE SINGLE MOST IMPORTANT POINT FOR THE PURCHASING PROFESSIONAL.  Deming mentions total cost (TCO for purchasing purposes) but also cites the value of long-term, single source  supplier relationships.  The loyalty and trust qualities imply partnering relationships.

5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.  This point speaks eloquently to the principles of TQM, kaizen, and TCO.  Constant improvement is the underlying principle of kaizen, which progresses directly and ultimately results to reduced TCO.

Click to see Bob’s online training courses

6. Institute training on the job.  Purchasing training has been painfully slow to come to fruition.  Call it the “Rodney Dangerfield” syndrome.  “I tell ya, we in purchasing just get no respect.  Even though we are the greatest generators of profitability in business, sales gets all the glory.” 

7. Institute leadership (see Point 12). The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.  This point speaks to micromanagement of staff and production personnel.  Lack of a coherent strategy is a management fault that should not be visited on labor.

Robert Menard,
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

Editor’s note: This is Part One of a three part series on the powerful and pervasive influence of W. Edwards Deming on business in general and purchasing in particular.  Click here for Part Two which explains the impact of the first 07 points on purchasing and click here for Part Three which explains the impact of the next 07 points on purchasing.

In business schools today, Supply Chain Management studies are growing in popularity, a curriculum that did not exist when I was in grad school.  That is welcome progress.  In my mentoring of grad students at University Texas at Dallas  there is emphasis on current trends like Six Sigma,  the ISO family of certifications, sustainability, and others.

Every quality program, whether Six Sigma, ISO, or other is an off shoot of the Total Quality Management (TQM)  theory and practice developed by Dr. W. Edwards Deming.   Deming has had as big an impact on global commerce as any other influential captain of industry in the 20^th Century.

Deming’s iconic 14 Points of TQM were revolutionary when published in the 1940’s.  Deming is considered by the Japanese to have had the greatest impact on business of any foreigner.  Toyota was an early advocate of Deming’s work, a fact that no doubt contributed greatly to the subsequent rise and dominance of Toyota.

Although Deming died in his 90s two decades ago, his work lives on in the form of the Deming Institute  and its “Deming System of Profound Knowledge”, a 503(c)(3) tax-exempt nonprofit organization.   According to the Deming Institute,  below the Deming Institute introduction (in italics) are his 14 Points of Total Quality Management.  

“W. Edwards Deming offered 14 key principles for management to follow for significantly improving the effectiveness of a business or organization. Many of the principles are philosophical. Others are more programmatic. All are transformative in nature. The points were first presented in his book Out of the Crisis. Below is the condensation of the 14 Points for Management as they appeared in the book.” 

We introduce them here and will comment on each in Part Two of this series.

1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.

2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.

3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.

4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.

5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.

6. Institute training on the job.

7. Institute leadership (see Point 12 and Ch. 8). The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.

8. Drive out fear, so that everyone may work effectively for the company (see Ch. 3).

9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.

10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.

•Eliminate work standards (quotas) on the factory floor. Substitute leadership.

•Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.

11. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.

12. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective (see Ch. 3).

13. Institute a vigorous program of education and self-improvement.

14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.

Robert Menard,
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

Editor’s note:  This is the third part of a three part story about my visit to the Volvo plant in Virginia.  Click here for Part 1 and here for Part 2 .

 Energy Efficiency  

Volvo Truck’s goal at the NRV plant is to reduce energy consumption.  Substantial efforts have been made in retrofitting the nearly four decade’s old plant to save energy.  Insulated sky lights are everywhere.  Not only do they save large amounts of energy using natural light but the daylight has a positive, upbeat, and motivating impact on employees.  No one is trapped inside a behemoth plant for a third of the day without the stimulation of sunlight. 

 Another practical and effective energy savings investment is the use of infra-red heat at loading doors. Many plants with hundreds of doors for at receiving and loading docks still deploy forced heated or cooled air heated in a losing battle to combat Mother Nature’s overwhelming superiority.  The dock seals were in such good shape that I could not see daylight sneaking in so very little conditioned air escapes. 

 In typical infra-red systems, natural gas is ignited along the length of 3 to 4 inch diameter tubes. The heat energy radiates in all directions but shiny steel lenses in semi-circular (sometimes parabolic) shape collect all the energy headed elsewhere and reflect it down toward the floor.  Ideally, the “infra-red czne” heats the floor space most occupied by workers.

 Infra-red technology is so effective because it heats the mass, such as boxes of product, concrete floors, machinery, equipment, and people, not the air.  I have seen infra-red applications in much more severe climates such as a distribution center in Ontario.  I visited one in the 1980s to decide about using this new technology for a client.  The dock workers were in shirts, not jackets, on a day where the outside temperature was about – 20C, or about 0F.  The next morning, the workers were grousing that the place was cold because the overnight shift had loaded out about 40 trailers and much of the stored heat went out the loading dock door in boxes of product.  The concrete slab was warm but the difference on the skin was palpable.

 More Best Practices

 The value of ergonomics is embraced by everyone at NRV.  Environmental Health & Safety  is a gold mine for business, labor, and government.  Workers who suffer fewer and less serious injuries and illnesses are happier and more motivated.  They also increase productivity so ergonomics is an all-around winner.  Chairs and work station furniture are designed around the task.  Robots handle many of the repetitive motion tasks that would otherwise pose risks to workers.

 Just-in-Time (JIT)  techniques are everywhere at NRV.  The ASRS is one example but that is largely hidden from view.  The tire mounting and assembly is far more dramatic.  Forklifts unload many trailers full of tires from various manufacturers (sometimes specified by customers) and deliver them in a matter of minutes to nearby mounting and inflation stations.  The tires are then picked up by a robot that slips them onto axle assemblies where they are secured.  The entire axle/wheel sub unit is then installed upon a chassis frame which is upside down on a moving platform in order to ease labor and ergonomic burdens.  Finally, the assembled chassis unit is flipped around so the ever growing truck can roll along until the minutes old truck is fueled and driven off the production line.   

 Summary

 It is the assimilation of the technological and of the creative energies, directed by smart dedicated people under visionary leadership that distinguishes the NRV plant.  It is a company’s leadership that picks the management which executes the strategy that brings success. 

 The deployment of best practices like kanbans and kaizen, developed in Japan under the tutelage of Dr. W. Edwards Deming  after WW II and popularized by Toyota  are foundational principles.  Building upon Deming’s 14 points of Total Quality Management, the NRV plant has mastered lean manufacturing techniques. 

 None of this would be possible without the active and engaged input of employees of all stripes.  Bravo NRV!

 But the labor management partnership at NRV has not always been this strong as we shall see soon.

Robert Menard,
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

Editor’s note:  This is the second part of a three part story about my visit to the Volvo plant in Virginia.  It deals with many of the processes that make this plant a world class manufacturing facility.  Click here for Part 1. 

Kaizen, Kanbans, and “Kommunication”

 Pardon the forced consonance in this sub-heading.  Kaizen and kanban are well known Japanese words in manufacturing and “kommunication” looks more German than Japanese, but I digress.  Volvo’s integration of technology, proven supply chain techniques, and human interaction combine to create a highly tuned operation.   

A kanban  refers to the logistics practice to enhance the flow of materials needed for production.  It is not so much of an inventory control measure as it is a production control practice.  The Japanese word refers to bill boards but evolved to the use of flags to indicate the need for parts replenishment.   

Two bins of identical parts are co-located, sized to accommodate usage rate, product shape, and mass.  In earlier iterations, when one bin was depleted, it was pulled off line, automatically triggering a brightly colored flag that would alert the stores replenishment technician to refill the bin. The second replacement bin usually slid forward under gravity.  As technology advanced, and bins were bar coded, an automatic reader now knows by weight or movement that a bin is depleted and calls for replenishment.  It also checks inventory levels against the Manufacturing Resource Planning (MRP) program to know if an order to a supplier must be placed.   

Kaizen has evolved from concepts stemming back to post WW II economic reconstruction in Japan.  It has come to be known as a process of “continuous improvement”.  As such, it should be discussed at least on a daily basis.  The Volvo shop and production floor is dotted with small (4-10 seats) glass paneled meeting rooms that host improvement suggestion meetings.  These work stations and mini conference rooms epitomize the concept of kaizen.  

As to external communication, the prospect of outsiders speaking directly with workers is discouraged, even verboten in many plants around the world.  I always advise that such prohibitions are deal breakers for me and that if an attempt has been made to prepare the “interviewees” I will recognize it and make judgments accordingly.    

I have demanded to visit the woman’s rest room in Latin American, Eastern European, Asian, and particular Middle Eastern countries.  My interests are not political as much as personal.  If women employees are treated poorly, how will the customer be treated, especially if the face of that customer is female? 

Speaking to visitors at the Volvo plant was not prohibited; on the contrary, it was encouraged.  Within bounds of life safety, any visitor can speak to any line or management employee. 

What you can learn for the guy who does the work 

I approached one fellow who was enjoying a snack break and we spoke of the transmissions he was installing.  I still drive a manual shift car but I have heard much about continuously variable speed automatic transmissions (CVT)for heavy vehicles so I thought I’d ask him.  I learned more than I knew and realized how much Volvo must invest in educating and training its employees.  

He first said that the greatest impact was driver and public safety.  Since the transmission automatically and continuously adjusts to load conditions, the driver’s attention is not distracted by shifting gears and the double clutching required by heavy duty manual transmissions.  He added that the transmission was about the same size and weight of the conventional manual transmission but it provided better torque, efficiency, and durability.  What is more, a CVT costs about the same or less and it created greater fuel efficiency and less noise.   

That was another WOW revelation for me, a long recovering math/physics/engineering geek.  Supplier plant visits truly are a learning experience. 

Robert Menard,
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

Editor’s note:  By profession and providence, I have learned and absorbed so much knowledge from the many visits  to all sorts of production and service facilities around the world over many years.  Since the early 1990s, I have marveled at metal forming machines in Taiwan, glass fabricating machines in Italy, plastic extrusion equipment in the US, and mining apparatus in Argentina, that could do everything but talk to you.  How quaint a memory; today they not only talk to you, but anticipate your questions.  This is the first part of a three part story about my visit to the Volvo plant in Virginia.

Sometimes you just get lucky! 

Good fortune found me in Dublin, VA when the opportunity arose to visit the Volvo Group Trucks Operations Americas Cab & Vehicle Assembly New River Valley (NRV) Plant .  A friend in western VA, where NRV is located, knows that logistics and transportation clients were a substantial part of my consulting practice.  We had discussed the essential requirement of supplier plant visits as the lynchpin to successful supplier qualification , supplier evaluation , partnering , and Merger & Acquisition  activities so this favor represented a major tour de force for me.  To sum up my experience in one short word, WOW. 

The bird’s eye view

This plant assembles the heavy duty trucks seen everywhere on our streets and highways.  They haul freight in trailers and containers.  These trucks are known as semi-trailers or “tractors” in the US.  When attached to a trailer, the truck-trailer unit is affectionately known as the “18 wheeler”.  Many trucking industries and associations have adopted and co-opted the slogan, “America moves by truck”.  Well, many logistics firms would argue about this but let’s go with it for our purposes.  

The tour

 The VP of HR Volvo Group Trucks America escorted a group of six on a 3 hour tour.  We began with the Special Vehicles sub-plant which produces far fewer but more specialized units per day.  Our host must have been trying to ease us into the awe of we would see next, the full glory of the computerized assembly flow of the main production facility.   

Others in the group of six gawking visitors were not manufacturing or supply chain pros so their fascination was limited to seeing mechanized and assembly flow processes for the first time.  The plant assembly lines are intensively high-tech managed with automated vehicle guidance systems (AVGS), cartage apparatus and automated storage and retrieval systems, ASRS, and for pre-painted cab sub-assemblies using Radio Frequency Identification (RFID).

The ASRS was a real hoot.  A fully automated “virtual robot” continually receives commands generated from the automated assembly line for pre-pained and pre-assembled cab and chassis units stored in a tower warehouse.  It was so cool to see the unmanned vehicle racing at super human speed (no kidding) using RFID to locate and retrieve the stored cab and chassis units and then escort them to the assembly line for further manufacture.     

Technical choreography

In the hands of a pro, excellence looks easy. Wayne Gretzky, the Great One, made exceling at hockey look like child’s play.  Jay Leno is a master of comedy, Robert De Niro is an acting talent beyond peer, Bill Gates is a paragon of business and so forth.  In every walk of life, successful people make it look easy   

The untrained eye might see the ideal smooth flow but not appreciate the genus behind making it look easy.  This plant just does not proceed on autopilot.  The timing and logical order of operations is overseen in a computerized control room.  I have seen these at clients like NASA  headquarters, BNSF Railway offices in Fort Worth, and dozens of cement, steel, glass, and other manufacturing facilities around the globe.   

Despite all the high tech wizardry and programmed efficiency behind this split second production timing, any employee can stop the production line should any life safety issues arise.   This is the chevron of a company focused on its human capital, a quality oft claimed but rarely earned. 

online training in purchasing, negotiation, and sales

Quick stats about the plant 

• ·         Average daily production of two shifts
  • o   110 standard units
  • o   16 special units
• ·          Located on 293 acres bordering Interstate 81 in Dublin, VA
•            4881 Cougar Trail Road, P.O. Box 1126, Dublin, VA, 24084
• ·         Constructed in 1974 by White Motor Co., it was acquired by Volvo in 1981
• ·         The NRV comprises 1.6 million square feet, or more than 35 acres under roof
• ·         A total of 87 robots are used in the cab and paint facilities
• ·         More than 2,000 people currently work in the plant.
• ·         Certifications
  • o   ISO 9001 quality
  • o   ISO 14001 environment
  • o   ISO 5001 Energy
  • o   Virginia Governor’s Environmental Excellence Award
• ·         NRV reduced its energy intensity by nearly 30 percent in just one year

Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

A recent exchange with a mentee put an old image into new focus.  He wanted to know how to become a professional speaker in purchasing.  He asked me because he did not know anyone who fit that description but me.  His was not a request heard every day.   

When you think of a professional speaker, what do you envision?  Most see the traditional “motivational speaker” in the various familiar forms of a sales guru, a tear jerking story teller, an up-from-nothing inspiration, or a feel good empathizer.  Google “motivational speaker” to glean an idea of what most folks imagine when they think of this topic. 

Anyone who is primarily paid to speak is a professional speaker.  This includes motivational speakers but also seminar leaders, meeting & convention presenters, corporate trainers, and experts in many other fields.  Indeed, many aspiring entrepreneurs use public speaking as a marketing opportunity; they have the perception of an expert by virtue of position in the front of a roomful of prospects.   

Some speakers use bureaus, agents who seek, qualify, and book talent for clients on a fee basis.  A bureau’s job is similar to that of a dating club.  They line up a series of prospective speakers and the client choses.  When contacted by bureaus, I usually decline their offers to be represented because my role as professional speaker in purchasing is so unique.  For instance, of every 10,000 speakers with a specialty in negotiation, there is only one of me.  All the others are sales motivators, sales trainers, coachers, lawyers, or academics.  There is no other professional speaker on the subject of purchasing negotiation and I do not want the brand contamination of being lumped in with the others.   

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This fact does not surprise me as my book on purchasing negotiation (image) .  Among the many professional speakers belonging to the National Speakers Association , I am the only one ever to claim expertise in purchasing so it is truly a rarity.     

Suppose you want to hire a professional purchasing speaker? 

First, recognize that the pool is small.  You are seeking two rare specialties.  Ascertain credentials in both.  For example, professional designations in purchasing such as Certified Purchasing Professional (CPP) and Certified Professional Purchasing Manager (CPPM) are de rigueur and fundamental requirements.  Without these credentials, the person may be only passingly acquainted with the purchasing profession.   

Next is the more critical standard because we have all heard content experts who are fair to terrible speakers.  A good example is college professors who are typically more skilled in pedagogy than andragogy.  The result can be a boring disaster.  Membership in NSA for a period of five years or more is a good criterion.  This ensures that speaking is a significant source of the person’s income and that he or she has met the minimum requirements for experience.  Toastmasters , while a great organization, is primarily for amateurs.  Most bureaus will not accept such credentials. 

Finally, get the speakers references.  What corporate clients, training engagements and meetings has he or she served?  How many people have they addressed?  How many years have they been in the business, etc?  In what formats do they excel?  That is, workshop, keynote, emcee, seminar leader, and so forth.   

Or you can take the short cut and contact me about how we could collaborate.  Best wishes.