Why Your Procurement Staff and Sales Department Must Work Together
For many companies, the procurement department and the sales staff might as well speak different languages. After all, one group is busy buying new materials while the other is selling the finished product; their job descriptions are so different they might as well be housed in different ends of the building. This is a common error that blocks their ability to share knowledge.
Take the example of a company that was manufacturing, among other things, an aluminum chair. At this company, the procurement and sales divisions operate completely independently of each other. So when the procurement department had the chance to purchase the raw materials required to build this particular chair at a significant discount, they bought a huge amount. They were thrilled at what they thought was an opportunity to save the company a substantial amount of money.
What they did not know was that, down the hallway, the salespeople had discontinued that same chair due to a less-than-enthusiastic response from customers, similarly convinced that doing so would bolster margins.
Both groups were focused on the same goal, to improve profitability, and both were doing what they thought was best for the company, but by not communicating they managed to accomplish just the opposite.
Too many organizations divide their staff by department and fail to recognize which groups could benefit from collaboration. Sales and procurement are one of the best examples of this. They have much to learn from each other, but too often do not get the opportunity. Everyone involved is working with the same toolkit to accomplish what is essentially the same task—they are all negotiators looking to get an ideal price.
Communication is key. Get them together and make sure both groups are represented at budget meetings. In addition, having them all work out of the same office provides plenty of informal opportunities for knowledge sharing.
Sales and procurement are not the only departments that can benefit from working more closely together. Keep your eyes open for groups that might benefit from a few more face-to-face encounters. Get them together and they will start speaking the same language too, bolstering profits along the way.
Not a member-scholar yet? Join our financial community here!
Identify your path to CFO success by taking our CFO Readiness Assessmentᵀᴹ.
For the most up to date and relevant accounting, finance, treasury and leadership headlines all in one place subscribe to The Balanced Digest.