One of the most challenging aspects of my career in Procurement has been opening ownership’s eyes to our value. As Procurement Professionals we are more likely to be seen as a bottleneck or disrupter of business than an asset to the company. However, with any great challenge there comes great opportunity. Only one company in my career I can say truly used the Procurement department properly. That was only because it had no other choice. The margins are so low in Agriculture that you either focus on Procurement or die. Proof is in the huge consolidation of US agriculture market. Only a few large companies remain.
The thing that made the company I worked for so successful is that it understood the impact of an aggressive and high performing Procurement department. In my opinion they were way ahead of other companies and still didn’t fully leverage the power of the Purchasing team. Our department had too many people, our processes were very manual even with an ERP system, and the soft skills of the Purchasing Agents were very low. We should always strive to promote from within but the skill set of the Buyers were way too basic to be true contributors. Just another example of how a company that took purchasing seriously, could still improve.
What does this mean to us as Procurement Professionals? It means we have to do a better job of promoting ourselves as key contributors. Procurement has come a long way in the last thirty years and in my opinion we still have a long way to go. It seems as though I am in a perpetual argument with ownership about the importance of a great Procurement team. We are not a back office function. We can have true impacts on your top and bottom lines.
Leveraging the power of skilled buyers can turn backorders and lost sales into 100% fulfillment with minimal inventory. It’s impossible to grow your top line if your sales team gets the order but you cant deliver. Buyers trained properly in the art of negotiation can save you millions. Millions that go directly against your cost of goods sold. Millions that have direct impact to your bottom line. For every dollar we save on a unit of direct material its exactly one dollar towards your profit. No matter how good your best sales person is they are still working on your margin. For every dollar they sell you are only profitable by that percentage. Much less impact than a dollar saved in your costs.
We still have a long way to go as Procurement Professionals. Herein lies opportunity. We need to become better at making companies aware of our true impact. I was recently invited to a conference where the keynote speaker was talking about Category Management. I long to see the days where we are fighting for air time wanting to talk about how we turned a company at the brink of bankruptcy into a profitable contender.
Enrique Frecci Enriquez
Strategic Sourcing Manager
Miami, Florida, United States of America
“Procurement used wisely is key to both growth and profitability”
Enrique started his career in Procurement in 1997 at Aerospace Defense company that specialized in gas turbines for drone aircraft. At the time the company worked with industry heavyweights who helped him build his Procurement department. After the sale of the company Enrique moved on to have successful careers in Procurement and Sourcing in both the Agriculture and Pharmaceutical fields. The experience in both high and low margin industries has exposed Enrique with two radically different styles where he was equally successful. Enrique is as passionate about Sourcing and Procurement as he is about the drone and robotics industry. He believes the industry needs to formalize its Procurement departments now in anticipation of exponential growth in the years to come. Enrique graduated with an Undergraduate Business degree and an MBA from Florida International University. He is also certified by Outcomy as an Expert in Strategic Sourcing and Procurement. Enrique is co-founder of SWL Robotics, Inc. a company based out of Miami, FL dedicated to coastal surveillance and first response.