Purchasing and Negotiation Training

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.

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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.