Specialists help enterprises to acquire goods and services at the most favorable terms. A news item in February of this year might be something of a wake-up call: According to calculations by the Bundesverband Materialwirtschaft, Einkauf und Logistik (Federal Association of Materials Management, Purchasing and Logistics), purchase prices have never been higher for enterprises. Reason for it were especially prices for raw materials and semi-finished goods which increased on average 42.4 percent between 2005 and 2010. Purchasing consultants for enterprises have been specialized in fighting against price increases and obtaining the most favorable prices. They established themselves only in the last ten years – but they are providing impressive results: "Potential optimization in purchasing will go up to 15 percent", according to estimates by Dietmar Fink, Professor for Management Consulting at the Bonn-Rhine-Sieg University of Applied Sciences. That could easily provide savings in the double digit millions range for large companies.
Due to the ever increasing ties and interdependencies of worldwide merchandise flows, there is a huge demand for purchasing consultancy services. Particularly successful are specialized companies relying on the know-how of consultants with previous experience in various sectors of the industry. One of the first consultancies in Germany with a focus on purchasing and procurement is Kerkhoff Consulting from Düsseldorf with about 220 employees in ten countries.
One way towards cost reductions may be, for example, the new arrangement of a client's product groups – for which consultants will be asking rather basic questions: What and how much is needed for which products, what quantities and volumes must be kept in stock, who will supply reliably and at favorable terms, how can procurement orders be bundled? Additionally, these external specialists take care of professional invitations to tender and negotiate with suppliers for their clients. "In the end", says Gerd Kerkhoff, founder and CEO, "our clients will buy at ten percent lower prices on average. For service companies, like banks and insurances, savings will rather quickly be even 15 to 20 percent. These companies often don't even know how much they are buying." And what kind of discounts are possible.
Joachim von Lüninck, Managing Director of the purchasing consultancy a.m.consult from Bonn, also estimates the savings potential at "ten percent minimum in the indirect area". These are "indirect area" costs for logistics, IT, or research. Apart from cost reduction, "our clients want to make sure that their suppliers comply with environmental and social standards as well as guidelines against corruption", says [von] Lüninck. The procurement consultant will also help with a company's risk management to guard against delivery failures.
To elaborate suitable solutions for a particular client, he must know the characteristic features of the industrial sector his client is working in. That's why Kerkhoff not only employs economists, graduates in business administration, and business engineers but also graduates from other fields which do not go into consultancies via the classical routes – for example, medical doctors as procurement consultants in the medical engineering sector. For a.m.consult, career changers are "attractive especially when they are business engineers with professional experience in industrial fields", says von Lüninck.
However, more and more newcomers in purchasing consultancies also come from major enterprises like Siemens or Metro. If they had some years of professional experience and a higher function such as senior buyer or supply chain manager at their former employer, they will generally also start as senior consultant or project manager at Kerkhoff Consulting. Depending on their qualifications, executives may also start immediately as partners. However, not every excellent industrial buyer will automatically be an excellent purchasing consultant as well, says Gerd Kerkhoff: "As a buyer, I will just know suppliers and vendors; but as a consultant, I will suddenly have clients – and I will need to radically change my behavior. That's why our attention in new hirings will be as to who could become a good consultant from our point of view and who will best be working in the operative business." Career changers with professional experience will receive a fixed salary of between € 60,000 and 80,000 as consultants, plus a performance-specific variable compensation. |
