Profitability starts with an efficient purchase, so why not encourage a system of commissions on cost savings and avoided increases for procurement professionals?
Good Buyers have become rare these days especially since the pre-pandemic period and companies have become much more aware of their strategic role within their organization.
In a manufacturing context and especially when it comes to direct procurement, seasoned buyers can have a significant impact on their company’s COGS either by negotiating better prices or by avoiding increases for their employers.
Thus, we believe that procurement professionals deserve a fundamental reconsideration of their salary package as is the case for sales professionals. Ultimately and logically, the two are negotiating on opposite sides of the table and both contribute to the same bottom line.
Furthermore and without wanting to take any credit away from sales professionals, purchasing professionals are the magicians of modern times. Thanks to them:
– inventories are optimized, thus freeing up more cashflow
– leadtimes are reduced, allowing them to put their final products on the market before the competition
– relationships with suppliers are more resilient and improved, avoiding trade-offs to their disadvantage during supply chain disruptions
– the materials used are always challenged, giving their engineers the opportunity to test all the new products on the market and thus be forward-thinking in terms of research and development
– responsible purchasing and ESG are part of their daily thinking to be in a better position to meet future legal constraints and thus give a competitive marketing advantage to their companies.
In fact, there is already a bonus system for most buyers, based on their companies and their own performance, except that it is far from the commissions received in sales. Imagine a buyer who saves $1M in a year, he would receive $100K based on a 10% commission!
In any case, this is just a thought that we share with everyone because we are well aware of the crucial role that procurement professionals play nowadays in the different economies around the globe. What is obvious, they deserve better incentives and employers won’t be disappointed.
What do you think? Do you share the same idea?