David Nelson is a godfather in the field of purchasing and supply management in the United States. He served as chief purchasing officer in Honda (USA), a major automobile manufacturer, Deere, a heavy agricultural machinery manufacturer, and Delphi, an automobile parts supplier, and systematically improved the purchasing and supply management departments of these companies with outstanding achievements. When he served as Deere’s chief purchasing officer, Deere won the “Purchasing Gold Medal” from the American “Purchasing” magazine. This award is selected once a year in the United States and is awarded to a company that does the best purchasing and supply management.

At the 2009 annual meeting of the Institute for Supply Management (ISM), Nelson said something very interesting: The strategic position of the procurement department is reflected in its relationship with internal customers.

This is a very important point. Bullying suppliers will not determine the status of procurement if internal customers see procurement as nothing more than a chore. If the relationship with internal customers is not equal, it will be difficult for the procurement department to demonstrate its strategic importance. To improve status, you must demonstrate your value. If you can’t come up with ideas or do big things, and you have to follow the engineers’ lead in everything, procurement is destined to be a errand boy, and the relationship with internal customers is not on the same level.

To be respected, you must first be worthy of respect. To be worthy of respect, you must first do your job well and thoroughly. Senior engineers are respected because they are technical experts, their drawings are well-organized, and their specifications are practical; finance is respected because their finances are well-organized, their cash and inventory are balanced, and their accounts are clearly managed. The object of procurement work is suppliers. To be respected in procurement, there must be a system to manage suppliers in an orderly manner.

Companies that are good at procurement solve problems at the supplier level, such as supplier selection, development, and elimination. Companies that are just errand boys often focus on parts and material numbers, and are busy all day long treating symptoms. If you spend all day dealing with poor quality and material shortages, you are probably far away from the strategic level. To put it bluntly, you are just doing odd jobs. Who doesn’t know how to do odd jobs? And who respects those who do odd jobs?