If you’re a B2B company, chances are high that you interact directly with a buyer who is part of the purchasing department for his or her company. Such buyers are charged with helping their organizations procure the products and services needed to meet their operational or manufacturing demands.
The purchasing department duties range from finding suppliers that can deliver the materials needed, on time and within budget, negotiate contracts and payment terms, create shopping lists and other resources, place orders, and verify that all orders were correctly delivered and received on time.
The Delicate Supply Chain Balance
The purchasing department plays a vital role for the organization. The group is tasked with predicting and acquiring the right much material needed at any given time to keep the manufacturing or assembly of items for marketing humming along. Order too little and teams and machinery are kept idle; order too much and the company may need to pay to store the excess materials, or even risk spoilage.
For some organizations, like retailers or distributors, the purchasing department must be able to predict what consumers are likely to want and buy in the quarters and seasons ahead and ensure that inventory is received on time. The costs of making a mistake in those predictions are high and may lead to big markdowns and hits on margins (it’s easy to see why buyers have stressful jobs!).
Purchasing departments tend to have a hierarchy of roles, all of which play a vital role in ensuring the supply chain is optimized.
The Director of Procurement, sometimes known as the lead buyer, has overall responsibility for the performance of the purchasing department, including its day-to-day operations and operational efficiency (i.e. ensuring the company doesn’t overpay for materials or components and lower profitability).
Depending on the size of the company and the department, the Director of Procurement may very well be the person with whom you negotiate an annual contract.
As the number two position, the deputy director helps to oversee the daily activities of the department and is likely the person that the buyers come to with questions or for advice.
These are the buyers who are charged with buying all of the materials that fuel the supply chain. The onus is on them to order the right amounts, or to predict what customers will want to buy in an upcoming season.
In larger organizations, the senior buyers are likely to be users who actually place orders through your eCommerce site.
Junior buyers report to the senior buyers and are responsible for a subset of inventory needs or consumer trends. They may also be charged with evaluating a set of suppliers who can meet their company’s price and delivery requirements.
In many organizations, junior buyers aren’t permitted to place orders; their job is to prep an order for a senior buyer to approve and submit.
No Buyer is an Island
Although every team member has their assigned role, more than any other department the purchasing team works in unison with one another, at times pitching in to help a buyer find needed supplies for a project or creating a purchase list for projects that can be shared with other buyers. The latter is especially true for certain kinds of organizations, such as builders, architects, lighting-design firms, and so on. These buyers will often create a list of materials to complete a certain kind project that will be shared with other buyers and serves as a starting point or reference for future projects.
Similarly, buyers for manufacturers will assemble a bill of materials (BOM), which is a list of the raw materials, sub-assemblies, intermediate assemblies, sub-components, parts, and the quantities the company will need to produce its end products. It’s easy to see why this is a highly skilled position! It is likely that a senior buyer may do the initial assembly of a BOM and share it with multiple junior buyers to use going forward.
While all buyers cooperate with one another, and share resources like project lists and BOMs, that’s not to say that all buyers have equal buying power. Many organizations place a spending threshold for their junior buyers, and some allow them only to assemble an order but require that order to be reviewed and placed by a senior buyer.
What Does This Mean for B2B Ecommerce Sites?