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04/23/2012

Masters of the Matter

Shopping with a strategy: Why natural scientists are ever more in demand in the field of purchasing

 
 
What are the functions an expensive smart phone will have, but a cheaper one does not have? How much ocean view will I get for my money from one or the other travel agent? And will breakfast be inclusive? What we'll frequently find out in such everyday decisions: It pays to compare prices. When we save in one place, we can afford more in other areas. That's not any different in industry and the economy. In terms of smart purchase strategies, producing companies are particularly challenged. »In the automotive industry for example, the purchasing volume may be up to 80 percent of sales«, says management consultant Dr. Bernhard Höveler. Across all industrial sectors, it's still about 50 percent: »Half the sales will be consumed, as it were, by the purchasing volume.«

Thus, to be competitive, companies must proceed smartly in procuring their raw materials and try to keep their costs as low as possible. Feasible solutions can best be provided by experts in that line: Natural scientists for instance. And they are also the ones doing an important part of the consulting service at Höveler Holzmann Consulting. »Materials experts, physicists, chemists and other natural scientists know best about the purchased materials. They will know, for example, what the properties of a particular steel grade is and they can competently present themselves to our industrial clients«, says Dr. Höveler. Here, natural scientists frequently work together in small teams with economists, computer scientists or engineers.
It is characteristic for consulting work to accompany the important steps in a client's purchasing process. »Our consultants negotiate new prices with suppliers; they seek alternative raw material sources in international supply chains or try to secure supplies«, reports Matthias Hoff, Head of Personnel at Kerkhoff Consulting. The individual projects won't remain concepts on paper but will be implemented jointly with the client. Matthias Hoff thinks that natural scientists especially have the necessary analytic approach for such work: »In their studies, they proved able to advance into deep complexity levels.«

But even in the companies themselves, natural scientists will find opportunities for development in the purchasing area. »They can introduce their specific know-how, for example, into procurement teams at medical clinics and hospitals, as well as in the food and cosmetics industry«, says Dr. Holger Hildebrandt, Senior General Manager of the Bundesverband Materialwirtschaft, Einkauf und Logistik (BME – German Federal Association of Materials Management, Purchasing and Logistics). Particularly suitable would be natural scientists for the purchasing departments of companies working in the areas of physics, chemistry, pharmaceuticals or medicine. At Pascoe Naturmedizin for instance, a manufacturer of herbal and homeopathic medicinal products, biologists take care of the procurement of over 600 different raw materials – from A like ›allium mother tincture‹ to Z like zinc compound.
»Broad knowledge about the complexity of biological raw materials and their mode of action is a prerequisite for the integration of new suppliers or manufacturing processes«, explains Karl-Heinz Dworschak, Head of Purchasing at Pascoe. Biologists are working closely together with pharmacists from the areas of quality control and manufacturing. In addition to raw materials, natural scientists at Pascoe's purchasing department also take care of the procurement of machinery for the production area. They know the high requirements on the manufacture of medicinal products which, in the final analysis, are reflected in the machines.

Technical purchasing also ranks highly at a chemical company like Wacker which produces and sells chemical/technical products such as semiconductors, polysilicon, or silicones. Accordingly, the staff's special knowledge is distinctly characteristic: 20 percent of them have a degree in engineering or in technical natural sciences. »At first glance, our area certainly requires process engineers«, explains Dr. Siegfried Kiese, Head of Technical Purchasing & Logistics at Wacker Chemie AG. »However, practice has shown that it's not necessary to make a restriction to this field of study.« Instead, the teams are frequently interdisciplinary in their setup and are made up not only of process engineers but also, for example, of biologists, chemists, physicists and electrical engineers. Their specific knowledge provides for effective collaboration on an internal corporate level: »Accordingly, the purchasing department should really understand what is being purchased and what's important with regard to the products and services to be procured. It must be able to differentiate between criteria and properties which are desirable and those which are absolutely necessary.« This would be important, for instance, in the procurement of instrumentation and control equipment for production plants. It would not only include in-depth knowledge of the pertinent suppliers and technologies but also the know-how regarding production processes. Moreover, fine instincts are necessary in the selection of suppliers. »Innovations by suppliers are becoming increasingly important in competition«, says Dr. Kiese. Thus, in searching for suitable suppliers for a product or a service, it is important to detect their potentials and make them useful for the company.

Many skills are obtained on location at the companies – such as specific purchasing processes; knowledge all around the raw materials is provided for the most part in college and university studies. And what other skills would be necessary if one were interested as a natural scientist in a purchasing job?
»Indispensable are foreign language skills to be able to hold one's own in the increasing globalization of the economy«, says Dr. Holger Hildebrandt from BME. He also lists persuasiveness, flexibility and own initiative as important personal qualifications. Moreover, one would have to adjust to the changing role of the buyer: »While procurement personnel used to manage mostly the costs in years past, buyers are now in demand as versatile negotiation partners.« Due to the markets' instability, particularly financial know-how is gaining importance. However, companies don't rate it very highly as up-front knowledge. »It's not necessary to have specific knowledge in business administration and management. Our consultants will learn their trade at Kerkhoff Consulting. However, prerequisites for successful consulting work will be not only economic thought structures but also the ability to see things under cost/benefit aspects«, explains Matthias Hoff.

At Wacker as well, business management knowledge is not absolutely necessary in the catalog of requirements for job applicants. It's true that natural scientists with job experience and an additional business management qualification are described as ideal candidates – »but we also had already excellent experience with outstanding novices who wanted a challenge outside their actual specialty, right after their graduate studies in natural sciences or engineering«, says Dr. Siegfried Kiese. What often sets them apart, he says, would be their capability of networked, multidimensional thinking: »Because neither the cheapest nor the most expensive product will necessarily be the best choice.«