Companies hire purchasing managers, buyers, and purchasing agents to find the best merchandise at the lowest possible purchase cost. Purchasers typically buy goods and services for their company or organization to use, while buyers ordinarily buy items in order to resale them for profit. Purchasers and buyers find the best goods or services, choose suppliers, negotiate prices, and grant contracts that ensure that the right amount of the product or service is received when it is needed.
Purchasing managers, buyers, and purchasing agents take several steps to reach these goals: they research sales records and inventory levels of current stock, find foreign and domestic suppliers, and stay current on any changes in either the supply of or demand for needed products and materials.
Finding good suppliers is crucial to the work of purchasing managers, buyers, and purchasing agents, who evaluate suppliers on multiple criteria (price, quality, service support, availability, reliability, selection, etc.). Purchasing managers, buyers, and purchasing agents study catalogs, industry and company publications, directories, and trade journals, often on the Internet. Reputation and history of a supplier is important, and future purchase actions may be advertised in order to solicit bids.
In government agencies and manufacturing firms, purchasing specialists typically are dubbed contract specialists; buyers or industrial buyers; or purchasing directors, managers, or agents. These specialists acquire various elements necessary for production: materials, parts, machines, supplies, services, etc. They can obtain anything from raw materials, machinery, and construction services to fabricated parts, office supplies and airline tickets. If the right materials, equipment, or supplies are out of stock when needed, work and production can be slowed or even halted.
Effective purchasing specialists need to be deeply familiar with the technical aspects of the goods or services they purchase. Some purchasing managers, known as contract or supply managers, concentrate on negotiating and supervising supply contracts.
In large industrial companies, buyers and purchasing agents are often seen as having a different role from purchasing managers. Buyers and purchasing agents tend to concentrate on standard purchasing tasks; they frequently have a particular area of specialization, such as in a commodity like steel, lumber, cotton, grains, fabricated metals, or petroleum products. Purchasing agents follow market conditions, price trends, or futures markets in order to conduct the more complicated or crucial acquisitions. They also may oversee a team of purchasing agents who deal in other commodities and services. In choosing between the titles of purchasing manager, buyer, or purchasing agent, specific job duties matter less than the particular industry and employer.
The traditional roles of purchasing or supply management specialists in many industries have changed because of evolving business practices. Throughout product development, for instance, manufacturing companies increasingly rely on these specialists to forecast the cost, availability, and suitability of parts and materials. Moreover, conferring with the purchasing department during the early stages of product design can help prevent problems with the supply of materials.
Through the year 2012, overall employment of purchasing managers, buyers, and purchasing agents is predicted to grow slower than the average. Increases in the services sector should offset some of the waning need for purchasing workers in the manufacturing sector. Purchases in the services sector have traditionally been made on an ad hoc basis, but firms are starting to realize the improved efficiency of centralized purchasing offices. As software continues to improve, demand for purchasing workers will continue to be limited. Such software has significantly reduced the paperwork needed to order and procure supplies; increased credit card transactions, thereby letting employees purchase supplies without using the services of the procurement or purchasing office; and allowed a growing number of purchases to be made electronically. Even with slower-than-average growth, some job openings will come from the need to fill positions left by workers who change occupations, retire, or leave the labor force for some other reason.
Expected changes in employment vary considerably by specialty. Through 2012, employment of purchasing managers is forecasted to grow more slowly than the average. Electronic commerce via the Internet has made information easier to get hold of and thereby increased purchasing managers’ productivity. The Internet has leveled the playing field in some ways, permitting both large and small firms to bid for contracts. Because of changes in the nature of contracts (specifically, exclusive supply contracts and long-term contracting), companies interact with fewer suppliers less often.
Employment of wholesale and retail buyers, except farm products, is also forecasted to grow at slower-than-average rates. Mergers and acquisitions in the retail industry have brought about the consolidation of most buying departments. Furthermore, larger retail stores are eliminating regional buying departments and relocating them at their headquarters.
Conversely, employment of purchasing agents through 2012 (except wholesale, retail, and farm products), is projected to grow about as fast as the average for all occupations. Purchases of complex equipment, which are difficult both to automate and to transact electronically, should not be significantly affected by the increasing use of electronic transactions. Employment of purchasing agents and buyers for farm products also is forecasted to grow about as fast as the average for all occupations because the ease of making purchases electronically is restricted by the need to evaluate the quality and freshness of farm products.
Historical Earnings Information
In 2002, purchasing managers reported median annual earnings of $59,890. The range of annual earnings for the middle 50 percent was from $43,670 to $81,950. The earnings of the lowest 10 percent were under $32,330, while the earnings of the highest 10 percent exceeded $108,140 a year.
In 2002, purchasing agents and buyers, except in farm products, reported median annual earnings of $40,900. The range of annual earnings for the middle 50 percent was from $31,390 to $55,440. The earnings of the lowest 10 percent were under $23,850, while the earnings of the highest 10 percent exceeded $76,740 a year.
In 2002, wholesale and retail buyers, except in farm products, reported median annual earnings of $40,780. The range of annual earnings for the middle 50 percent was from $30,040 to $55,670. The earnings of the lowest 10 percent were under $23,270, while the earnings of the highest 10 percent exceeded $76,070 a year.
Successful purchasing managers, agents and buyers may make substantially more than the figures presented above
To be certified as CPPP, students should take up a 1.5 hours online examination. Each exam would consist of 50 multiple choice questions.
1: Purchasing and Supply Management
2: Purchasing Decisions and Business Strategy
3: The Legal Aspects of Purchasing
1: Materials Management
2: Inventory Management
3: Just-In-Time (Lean) Purchasing
4: Purchasing Procedures, E-Purchasing, and Systems Contracting
1: Supplier Selection and Evaluation
2: Global Sourcing
3: Purchasing, Supply Partnerships, and Supply Chain Power
4: Total Quality Management (TQM) and Purchasing
1: Price Determination
2: Bargaining and Negotiations
1: Purchasing Transportation Services
2: Equipment Acquisition and Disposal
3: Healthcare Purchasing and Supply Management
4: Procuring Professional Services