I would have to say a great benefit to working in the purchasing industry is being comfortable negotiating. My wife and I took a trip to Cancun and as anyone knows who has been to Mexico is that items sold on the street are subject to haggling. Our list of purchases...

Sandals- Asking $45- Purchased for $15
Dice Cup- Asking $55- Purchased for $20
Coin Purse- Asking $30- Purchased for $10
Jacket- Asking $30- Purchased for $18
Hat- Asking $10- Purchased for $8

There was also an excursion to Xel Ha which is an all-inclusive resort with plenty of activities. Our vacation planning service offered the trip for $119pp. The local agencies advertised the same trip for $95pp. My wife and I preferred to book with our vacation service because they offered a warranty on the trip. After discussing the local pricing they took off 10% and we booked the trip for $107 each.

More evidence that just about all pricing is negotiable!

  Everyone wants to be thought of as good at what they do. In the world of Construction Purchasing the keys to being an important part of your company’s future are excellent decision making, honesty, organization, and having a bit of skill at psychology. If you can show talent in all four of these areas your chances of success are great. Other welcome traits are some basic jobsite construction skills, understanding the “slang” used around projects, and the capability of handling the stress that comes with helping a project that is either behind schedule or over budget.

    So how do you measure success? How do you know for certain that you are performing at a high level and earning what you are being paid? Success is found in each PO you write. If you can justify each order you place to both the requisitioner and the home office as being the best combination of value, quality, and risk you will find success.

As I am having troubles getting more Contractors to use the website regularly I am reminded of something I read. In Walden, Henry David Thoreau developed a better method to measure and weigh the grain and produce brought to market by farmers. The buyers of the food did not at all like the new scale. For them the current scales were already "too accurate". Thoreau eventually gave up on trying to sell or implement the idea and it died.

This is just me starting to worry for the first time that there could be problems ahead that have nothing to do with whether the site is good or not.

I was reviewing the feedback that Critical Sourcing has been leaving for several of our suppliers at JobsiteBuying.com and was pleasantly surprised at the level of communication. By just jotting down a sentence or two about many of the quotes received we were able to let the Suppliers know what is important when evaluating bids and what needs to happen to earn more business.

Assuming the trouble was taken to call the many suppliers on a bid by bid basis there would almost certainly be no record of the conversations. As human beings we hear and retain different bits of information that becomes skewed in our memories as time goes by. By putting down in type what is happening we are letting the suppliers review what is working and where they fall short.

The feedback tool is something I may want to push to our users as a great tool they could be overlooking.

Having spent the day reading various tech blogs and looking at the latest gadgets coming down the development pipe I started to wonder just how far, if at all, JobsiteBuying.com could move the technology ball forward in the construction industry.

The first method purchasing agents used to communicate with suppliers was the phone and file cabinet. This method is still widely in use today at projects with little main office support. The major pro was knowing the suppliers were actively working on issues, the major con was absolutely no documentation is possible concerning miscommunication.

The second was the fax machine. It allowed for immediate documentation of requirements for the first time. This is used rarely today as a scanner and email account works better. The major pro was it became possible to send drawings, RFx, or BOM to suppliers in real time. The major con is not knowing if your fax was just sitting on a machine not being attended to. The print quality was usually poor as well.

The third was email. It solved many problems by allowing contractors and suppliers to communicate quickly (similar to the phone) and allowed for the sending of files. A distribution list of suppliers allowed for multiple quotes of the Contractor requisitions. This is by far the better way to communicate with Suppliers with no major cons.

However, email is used for more than just finding the best pricing and availability for tooling, material, and equipment. Each requisition sent out will get responses out of order that do not easily relate back to the original request. JobsiteBuying.com is a web-based sourcing application that easilly manages each requisition along with all corresponding pricing. You can leave notes, feedback, and manage your suppliers through the service.

So have I come up with the 4th way to find pricing and availability? Time will tell, and I have finally hired an area rep for St. Louis so I can develop the next territory!

The economy has just been brutal in the St. Louis area for the Construction industry. There are very few projects underway and every week it seems like something is cancelled/postponed. I am very thankful that my industrial clients are still busy!

I have been interviewing to hire a salesperson to work in the St. Louis region and market/sell JobsiteBuying.com. Plenty of candidates have applied and there were 3 particular applicants I liked with one being my likely choice for the job. After someone is hired and trained I will be looking to open a Chicago territory. One nice result of interviewing is getting feedback about the JSB business concept. It was very favorable.

I wish there was something to say other than keep your head down and this too shall pass. Better days ahead!

1. Spend/Procure as if the money were your own. Be aware of where the better value is.
2. Manage the suppliers proactively. Reach out to them and let them know what is important to your buying decisions.
3. Improve how your job functions. Find ways to save money and report those savings.
4. Avoid friendships with suppliers. Be friendly, but professional.
5. Do the daily things right. From sending PO's to suppliers to following up questions don't let the little things go undone.
6. Communicate with your internal customers. What are you doing right? Be open to what you are doing wrong.
7. Resolve issues. Once a problem has been identified decide how important it is and send the reolution to all parties involved.
8. Education. Times change! Be aware of new strategies and keep up with your duties to be aware of them.
9. Network with other purchasing agents. It's a great place to hear of changes and meet people who could advance your career.
10. Use JobsiteBuying.com for the sourcing of your tooling, safety supplies, equipment rental, and material for your Industrial or Commercial construction project.

I was working with a Contractor who has the following process...

1. Requisition
2. Sourcing
3. Determine quote award
4. An approval is now required (REGARDLESS OF $ AMOUNT OR IMPORTANCE) by the

1. Project Manager (who has about 100 more important things to do)
2. Cost Manager (who already would be getting this cost information through accounting software)
3. Requisition Originator (what, he's not going to approve the purchase of something HE HAS ASKED FOR?!)

5. After 3 copies of the PO's are distributed and then signed off they are returned to the Purchasing department then the supplier is notified and the PO is sent to actually place the order.

This is a perfect example of a Contractor just doing things because they think they should. There is zero value added to the time and expense associated with 3 people approving a $30 order for dill bits or drinking cups. This particular Contractor is also a very large company with offices throughout the world. I don't know if this process goes on at all their projects or if it is just the way the person in charge wants on this particular project.

Now, I'm all for an approval process that is staggered by expense or strategic importance. Some type of sign off on a $1,000 order is fine. A more complex approval could also be put in place for a $25,000 order. My point is don't put self imposed barriers in place that take away resources. There are also a number of better ways to get approval than by just handing off copies of PO's. You can post to a internal server for digital signing or email the PO's and quotes as a package that can be forwarded back as an approval... you don't have to unnecessarilly print so much!

Next week we will be installing a new PO database for a large contractor doing an environmental project in the Midwest. They turned to Critical Sourcing to help find a way to process PO's that use less paper, are searchable, provide cost data, and provide other benefits. I'll be working this weekend to get the database customized to their needs.

The database allows for the importing of data from a requisition form (in Excel) so double entry is reduced. It also work with our sourcing website (JobsiteBuying.com) so you can import the data directly from the web without needing to save the file first.

Jenni will go down for a couple of days and train the 2 users. She will also introduce our inventory and equipment tracking systems.

On a related note I had a meeting with a contractor last week that still uses a 4-part form and a file cabinet when they issue PO's. They are ripe pickings for a change and this DB could help them as well.

I have been reading The Google Story to see if there are any ideas I could apply to JobsiteBuying.com. I read a particular paragraph that I can relate to. During the first year the Google guys were trying to build and monetize their search engine they said the following...

"During the first year we collectively had concern that the market we were pursuing was more difficult and intractible than we originally imagined."

Exactly. They had already proven their search engine was the quickest and most accurate in the world but they found businesses unwilling to adopt their better mousetrap. The key word was "intractibility".

The answer to intractibility is time and persistance. Eventually people will catch up with new ideas, the trick is to last long enough to see it through.