Corporate buying is not that different from us shopping for ourselves or our families. When we shop for the latest fashion must-haves from I.T., H&M or Lane Crawford, we know we are getting our needs fulfilled, whether they make us look ravishing, keep us warm for the ski trip coming up, or just means of getting ourselves out of depression. There are also purchases which we count them as investment in our everyday lives and work, like a flashy suit, a laptop or educational games for our kids. In the corporate world, we buy just about the same things, only for very different reasons.
In the world of procurement, there is a rough distinction of two broad camps. Intuitively enough, one is called Direct Materials while the other one Indirect. Direct Materials refer to those that go into the product we sell. Indirect Materials, on the other hand, refer only to those purchases made for the support of the corporate’s operation. Take Hewlett-Packard (HP) as an example. Its direct materials sourcing team will buy from plastics to printed circuit boards to batteries to packaging, while its indirect materials sourcing team will buy labor (staff), office rental, airplane tickets, and TV time spots to support its business operations.
Every corporate has both direct and indirect material sourcing. Though we do not always see two distinct teams in service companies today (like financial institutions for example), I can still categorize whatever I buy that goes into the services we sell as Direct Materials. It’s just a definition and no outsiders care about it, except us.
Like fashion buyers or fabric merchandisers you see in “The Devil Wears Prada”, it takes 10 or 20 years of experience for a buyer to be specialized in the direct material categories. A food buyer, a plastics buyer, or an electrical buyer can be in hot demand depending on where you are located and what experience and supply base intelligence you can bring to the company. The buyer needs to work closely together with the product development and production teams so as to source the right ingredients for the company’s products, and at the right price. There are schools, networks, organizations and even unions for this community. It may not sound too intriguing to the general public, but one can still quite easily appreciate the professionalism they bring to the table.
Unfortunately, I am not in this category.
I am an indirect materials buyer.
All of a sudden, the word “professionalism” shatters into pieces, and a loud piercing scream usually comes right afterwards. Seldom out of revelation, mostly out of disgust.
“So you mean like… you are buying pencils?”
“Oh so you must be responsible for all those crappy knockoff Post-It notes they make us use now!”
“Get your hands off MY printer!”
“You just do NOT understand how bad the company will look if I am seen coming out from a HolidayInn by my clients!”
“What? You make us fly Korean Air?????”
Well, if answering what I do hasn’t bored people to death in the first place, these questions will definitely kill any cocktail party conversation.
Hmm… Can I yell “Trick or Treat!”?
Confessions of a Corporate Shopaholic 