UK Circuits’ Chris McTernan, walks readers through the role of procurement director and how the perception of purchasing, procurement and supply chain functions is changing
What I love about procurement for manufacturing is the ‘tangible factor’. I can negotiate the best price for a package of components and, within weeks, see the result on the shop floor—the end use of the procurement work. This gives me a wider perspective of how the company operates which helps me see where I can add real value to the business.
If one positive has emerged from the global upheaval of recent years, it’s the fact we’re now seeing a shift in perception of purchasing, procurement and supply chain functions from a simple administration role that can be ‘churned out’ by some of the least valued and most poorly rewarded people in the business. Providing we have the answers, the recognition and reward will come. One of the big attractions for me at UK Circuits is that the procurement function is seen as equally important as sales and operations. I look at it as the three core functions—if you like, the three divisions—of the UK Circuits army, in the battle for growth and success.
Building relationships
There are two things that drive me in my role. Firstly, it’s the reward and recognition from the rest of the organisation—not for me but for and of the team that I lead. Secondly, developing relationships with suppliers. I always have, and will continue to enjoy, spending time at source with suppliers, growing relationships from the initial requests for information through to the first purchase order and then developing the PO demand through to a contractual relationship, one with mutual value. I’ve had more engagement with people from vendor organisations, once they have come to realise that I understand their problems and demands and that I want to work with them.
The most challenging aspect of my job is serving my internal customers and managing their demand properly. If I can get the procurement function to be strategically aligned to serving our internal customers and engaging effectively with the people within the business who load up the purchasing demand, then we have a real chance of sustained success.
Making change right
The most important advice I’d give my successor is, do the right thing. It’s a very simple sentence that works in almost all the judgement calls that must be made. If you’re going to make a change, launch something radically new or ask people to do something differently, make sure that you’re doing it for the right reasons and that it sits right with you in your heart and not just your head. Especially in a smaller organisation, where failed initiatives are remembered for much longer. This comes from my experience over the years. I’m an enthusiastic campaign leader, but I always make sure the campaign is the right thing to do.
If I could go back, I’d tell my 21-year-old self to stop assuming the grass is greener on the other side. Make the most of current circumstances. My analogy is, the grass you’re standing on will be green, if you water it. Also, if you’re talking to yourself, tell the truth. Be honest with yourself.
An active contribution
I’d describe the culture where I work as ‘actively contribute, shake things up, add value’. I’m pretty sure that I was hired on that mandate
It’s been made very clear to me that the procurement function at UKC can be just as instrumental in effecting change and growth as any other. I’m given a share of the microphone at business’ decision-making events. This is exciting to me, and something which all UK manufacturing businesses should embrace more. The Board at UKC seems very open to innovative and different approaches to solve problems. There’s no hiding behind pretentious glossy corporate soundbites here. It’s immediacy and efficacy that counts, and I like that.
Changing face of procurement
The demands of procurement have changed significantly since I started my career almost two decades ago. The fact that just one container ship running aground in the Suez Canal and threatening almost every supply chain has brought about some of the biggest changes I’ve seen in the last 15-years. It’s finally exposed the fragility of the just-in-time replenishment model and the ‘smoke and mirrors’ myth that it is. It’s also shown that being dependent on a globalised supply chain is completely unsustainable. When I worked in oil and gas construction procurement, having materials at arm’s length in the period before you needed them was the key to success.
For the foreseeable future, I think manufacturing must revert to having arm’s length supply of materials and components. This means a different way of working than we’ve been told over the last 20-years, from the multitude of macro distributors. Distributors that can mould themselves around the customer demand or fragment into bespoke service providers and are prepared to hold stock and consign stock for the SME market, will be key to successful operations. The UK SME manufacturing market share is massive and the assurance and demand are there, if suppliers, distributors and service providers are able to see the wood from the trees.
