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Week of 29 June 2020: Purchasing and Graft

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There is a certain area of the United States where I will not bother calling on the mills and, for any supplier who asks me, I will tell them not to bother, either. It is a very distinctively defined area and my admonishment has held true for over thirty years. I do not know what it was like before then, I just know my experience there dates back just a little over thirty years and it has been a universally poor one. I suspect that attitudes there go back many decades before that.

A colleague of mine had a project in this region one time (and told me there was no graft involved in his case). I suspect that was true, he has a special service and there are few who can perform what he does. Hence, competition is low, and he feels little pressure to compete for projects. As a hobby, he collects guns. While out at lunch one day, he walked into a local gun shop. The owner struck up a conversation with him, ask him why he was in town (it is a small town). After he told the owner this information, without further conversation, the owner took him over to a wall with many nice shotguns, "Well, I can fix you right up, these are the ones the boys at the mill want right now."

The graft in these mills does not start with the mill employees--I have watched one mill where corporate has come in a dozen times in the last twenty-five years and wholesale fired the purchasing and the engineering departments. They are replaced with honest people. The locals then corrupt them, for the locals know no other way to do business than with bribes. They do not care that the people they corrupt are going to be fired, that just gives them a new crop to work on in a couple of years. Corporate never catches on, the cycle just repeats.

The purchasing department should not only set the example for dealing with suppliers, the purchasing department should be the department that sets the policy for the entire mill. And, then, they should be the one that polices it, too.

What is the right limit to be allowed for favors brought in by suppliers?

The best mills tolerate nothing. By nothing they not only mean lunch, dinner, and golf outings, they mean no hats, pens, or calendars. You see, when you tolerate a little, that is a wedge to allow a lot.

What is wrong with graft? Two things. First, it says you allow something other than value to be a determining factor in your purchasing decisions. Second, it says you are willing to steal from your employer, because everything given to you by a supplier comes from money your employer pays for goods or services with that supplier. It is as simple as that. Looks innocent, it is not innocent.

So, here in June, I am wrapping up a series of five columns on purchasing. We have covered the role of purchasing; purchasing and education; payment terms; true expediting services and graft. Not once did we talk about negotiating the deal. Why? Because negotiations are the skills you should have when you arrive in the position of purchasing agent. It is a given that you can negotiate. This is not where you need to focus. It is the five peripheral items we have mentioned this month that will distinguish you from your run-of-the-mill purchasing agent.

You have a vital role; you are a fiduciary. Excel at your job.

Along with everything else, as if I have not given you enough to do already, be an exemplary model of safety in all that you touch; and you touch many, many things.

Be safe and we will talk next week.

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