Table of Contents

Section Section I: Purchasing & Supply Management Career & Skills Report Overview Section II: The Evolving Purchasing & Supply Management Profession Section III: Purchasing & Supply Management Skill Facts Section IV: Economys Impact on Purchasing & Supply Management Careers Section V: Purchasing & Supply Management Career Considerations Section VI: Summary Section VII: About The Authors & Sponsor

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Section I: Purchasing & Supply Management Career & Skills Report Overview
The Purchasing & Supply Management Career & Skills Report is provided to give you, the purchaser, insight on the important skills, career development trends, and perceptions that impact todays purchasing and supply management profession. In this report, you will learn interesting statistics about the profession and will read analyses of those statistics. The purpose of the report is to help you create a personal career development plan based on best practices in the profession and, ultimately, achieve maximum performance in the workplace. All of the data used in this report were gathered in a survey of purchasing and supply management professionals. Over 1,900 purchasing and supply management professionals from around the world participated in this survey to assess trends, skills and career development in the purchasing and supply management profession. Survey responses were collected in late 2008. Next Level Purchasing conducts these surveys annually, so some of this years statistics are compared against statistics gathered from previous years surveys. This report will be read by purchasing and supply management professionals in over 100 countries around the world. Unfortunately, it is not practical to publish the monetary values expressed in this report in each readers home currency. Therefore, US dollars will be used. If you wish to convert the currency values into your home currency, you can find a currency converter at www.xe.com. Profile of Participants The average number of years of purchasing experience for the survey participants was 8.4 years. Sixty-seven percent of the participants supervise other purchasers. Table 1 illustrates the age groups of the participants. Table 2 illustrates the job titles of the participants. Table 3 illustrates the geographical locations of the participants. Table 4 illustrates the educational background of the participants. The total of the percentages may not add up to 100% due to rounding. Table 1 Age Groups of Participants Age Range 20 - 29 30 - 39 40 - 49 50 - 59 60 or over Percentage of Participants 25.8% 38.3% 23.9% 10.6% 1.5%

Table 2 Job Titles of Participants Percentage of Participants 4.6% 33.9% 35.4% 5.5% 1.7% 4.0% 0.6% 1.5% 1.7% 3.9% 2.6% 4.8%

Job Title Expediter/Junior Buyer Buyer/Purchasing Agent/Procurement Specialist Purchasing Manager/Supply Manager Director of Purchasing/Procurement/Supply Chain VP of Purchasing/Procurement/Supply Chain Chief Procurement Officer President Training Manager Vendor Representative/Consultant/Sales Student Unemployed Other

Table 3 Geographical Locations of the Participants

Location Asia Africa North America Europe South America Australia

Percentage of Respondents 40.4% 26.4% 22.2% 7.9% 1.7% 1.3%

Table 4 Educational Background of the Participants

Highest Level of Education Completed Ph.D Masters Degree Bachelors Degree Associates Degree High School Less than High School

Percentage of Respondents 0.9% 26.0% 45.6% 13.4% 13.7% 0.4%

Section II: The Evolving Purchasing & Supply Management Profession

Purchasers Most Advanced Accomplishments The purchasing and supply management profession is an exciting one due in large part to the rapid changes that take place within it as well as the fact that there is upward mobility available to those who perform well and remain dedicated to the field. The participants were asked the question In your opinion, what is the most advanced thing in purchasing that you have ever done? The 10 most common responses were: 1. Effective negotiation of large purchases 2. Achieved cost savings 3. Used/implemented eProcurement 4. Implemented a purchasing system 5. Global sourcing 6. Supplier management and development 7. eSourcing/reverse auctions 8. Contract management 9. Inventory control 10. Managed a purchasing and supply management team It should be noted that if an accomplishment was common enough to be on the foregoing list, it is probably not widely considered advanced by todays standards. Some of the less common, but perhaps most interesting, answers to the question included the following (in no particular order): Bundle volumes internationally Value chain analysis Supplier report card metrics Developed a vendor rating model VMI (Vendor Managed Inventory) End to end supply chain mapping to drive out cost (20%) and lead time (75%) Risk Analysis and figuring out what can go wrong and how to avoid in future Corporate spend analysis Green Procurement compliance for parts procured Developed a supplier segmentation program for company procurement to use and roll out to entire organization I have re-engineered our company supply chain SPSM Certification course Developed an effective supplier qualification program. Just in time inventory Development of Supplier Quality and Performance Management System Market Analysis & Benchmarking Total cost of ownership analysis Integrated another company's supply chain into our own Supplier Pre-Qualification and Assessment Helped a supplier to survive through bad times Value analysis 4

Restructuring the Purchasing org from decentralized to centralized. Continuous Improvement to reduce cost within the supply chain, beyond price Spend data classification

Purchasers Predictions of the Future While many of the items in the preceding lists are traditional purchasing duties, several of them are practices that have only become widespread in the past decade. So what changes in the field do purchasing and supply management professionals expect in the years ahead? The participants were asked the question For 2009 and 2010, what changes do you predict in the purchasing profession? The top 10 responses were: 1. Higher expectations for cost savings/cost reduction 2. Increased use of eProcurement 3. Purchasing job reductions 4. Increase in the recognition of the purchasing department 5. Increased focus on supplier development and collaboration 6. The shift from tactical to strategic purchasing 7. Increased outsourcing of the purchasing process 8. Lower prices due to the economic downturn a buyers market 9. More difficult negotiations 10. Increased global sourcing

Section III: Purchasing & Supply Management Skill Facts

Most Important Skills With the evolution of the purchasing and supply management profession described in Section II of this report, it should be no surprise that todays purchasing and supply management professionals need better skills. The participants were asked to identify the most important skill in purchasing and supply management. The participants identified Negotiation as the most important skill. This was the third time in the past five years that Negotiation took the top spot. The other two years, this years second place finisher Communication/Relationship Building/Interpersonal Skills was voted #1. Chart A shows the distribution of responses to that question. Chart A Most Important Skills In Purchasing & Supply Management

Through its email newsletter, PurchTips, as well as its online classes, Next Level Purchasing helps purchasing and supply management professionals stay current in these skill areas.

Section IV: Economys Impact on Purchasing & Supply Management Careers

Jobs & Training Affected In A Bad Economy In 2008, most of the world experienced an economic downturn which has lasted into 2009. This impact was felt across most every profession. While the scope of this reports research did not include gathering statistics that would have allowed a comparison between purchasing and supply management and other professions, this report can at least share some valuable data specific to purchasing and supply management. With employers cutting millions of jobs in North America alone in 2008, unfortunately, the purchasing and supply management profession was not spared. Over 20% of participants indicated that they held a purchasing position that was eliminated in the previous year. In addition to job losses, training budgets also appear to be affected. The number of hours of training per person dipped slightly after a seven-year high was set in 2007. The average purchasing and supply management professional participates in 19.6 hours of training annually. This represents a 4% decrease from the previous years average of 20.4 hours, yet remains significantly above 2002 - 2006 levels as illustrated in Chart B.

Chart B Hours of Training

Despite the fact that the average number of hours of training decreased from 2007 to 2008, it appears that those statistics do not indicate that fewer purchasing and supply management professionals are being trained, only that those individuals accustomed to the most training have seen less training authorized. Consider that the percentage of respondents who reported receiving no training remained relatively unchanged from the previous year, rising to 24.7% from 24.6%. In contrast, the percentage of respondents reporting 80 or more hours of training annually dropped significantly to 1.8% from 6.6%. 8

Budget pressures may have also affected how training is received. Online training, also referred to as e-Learning and often regarded as the most cost-effective approach to education, continues to rise in popularity with this years participants reporting that theyve participated in an all-time high average annual number of online classes in the past year 1.43. This is nearly double the average number of online classes taken just four years ago (0.75).

Section V: Purchasing & Supply Management Career Considerations

Employers Embracing Skill Development Are Rewarded High skill levels do not just benefit purchasing and supply management professionals they benefit the organizations that employ those highly skilled professionals. Skilled purchasing and supply management professionals deliver improved results to their employers in the form of: More cost savings More efficient and reliable operations Less risk In fact, participants who have earned the SPSM Certification saved their employers an average of $1,022,046 (US) per person annually compared to $802,020 for those who have not enrolled in the Senior Professional in Supply Management Program a difference of $220,026. The actual difference may truly be much higher as the Senior Professional in Supply Management Program teaches a more conservative, verifiable approach to reporting cost savings that ensures the recognition of legitimacy by senior management and Chief Financial Officers. Without such an education, purchasing and supply management professionals are more likely to overstate their cost savings. Considering that the current all-inclusive cost to enroll in the Senior Professional in Supply Management Program is only $1,149, employers were rewarded handsomely for their investment. Individuals Embracing Skill Development Are Rewarded While the preceding paragraph clearly indicates the financial benefit to employers for developing the skills of their employees, the individuals themselves stand to gain. The survey revealed that those who have earned the SPSM Certification have an average annual salary that is $14,188 higher than those who have not earned the SPSM Certification as illustrated in Table 5. Table 5 Certification Salary Comparison

Educational Combinations Being Compared

Difference in Average Salary

SPSM Certified Vs. Not SPSM Certified

Those with SPSM Certification earn $14,188 more per year than those without the SPSM Certification.

Often, purchasing and supply management professionals wonder which educational path to pursue to maximize their income. The survey revealed some additional insights that seem to indicate that certification is a better investment than an additional college/university degree for someone wishing to achieve career advancement in purchasing and supply management. Consider the data in Table 6. 10

Table 6 Education Combination Salary Comparison

Educational Combinations Being Compared SPSM Certified & no Bachelors Degree Vs. Bachelors Degree & not SPSM Certified SPSM Certified & Bachelors Degree Vs. Masters Degree & not SPSM Certified

Difference in Average Salary Those with SPSM Certification & no Bachelor Degree earn $10,486 more per year than those with Bachelors Degree and no SPSM.

Those with SPSM Certification & Bachelors Degree earn $9,505 more per year than those with Masters Degree and no SPSM.

The data showing financial benefit to both the employer and the employee may encourage the purchasing and supply management professional to either (a) petition his/her employer to fund certification or (b) fund his/her own certification. If the purchasing and supply management professional opts to petition his/her employer to fund their skill development, citing these facts can help one make his/her case: Over 75% of purchasing and supply management professionals get some level of training within a years time, even managers The average company annually budgets $1,161 per person for training The financial benefits to the employer, most notably increased cost savings, will likely exceed the amount expended on training provided that the proper, results-based training is selected Considering that the current all-inclusive cost to enroll in the Senior Professional in Supply Management Program is only $1,149, even if one has to personally take financial responsibility for ones own skill development, it appears to be a wise investment. In addition to the salary statistics previously mentioned, consider the data in Table 7 which indicates the results that survey participants would expect to get after earning a certification.

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Table 7 Expected Results From Certification (out of 1,450 responses to this question, participants could select as many results as they felt were applicable) # Participants Who Expect This Result 446 482 739 904

Result Earning a certification will help the purchasing and supply management professional get a promotion Earning a certification will help the purchasing and supply management professional get a pay increase Earning a certification will help the purchasing and supply management professional get more respect Earning a certification will help the purchasing and supply management professional get a better job

True purchasing and supply management professionals should not let their employers unwillingness to invest in training be a deterrent to their skill development. To have a successful career, individuals need to take control of their own destinies. After all, the individual reaps many rewards from being more highly skilled.

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Section VI: Summary

Next Level Purchasing conducted a survey of over 1,900 purchasing and supply management professionals in late 2008. The average participant had 8.4 years of purchasing and supply management experience and the majority of participants supervised other purchasers. Recent trends have changed the job responsibilities of purchasing and supply management professionals. Today, purchasing and supply management professionals are spending more time on global sourcing and supplier development and management activities. Purchasing and supply management professionals are predicting higher expectations for cost savings/cost reduction, increased use of eProcurement, and increased purchasing department recognition in the coming two years. With many recent changes in the profession, purchasing and supply management professionals are devoting more time to education than earlier in the decade, spending an average of 19.6 hours a year on training. More and more of that training is being accessed online, with the participants engaging in an average of 1.43 online classes in the past year. The participants consider negotiation to be the most important skill in purchasing and supply management. Certification is gaining importance in the purchasing and supply management field. Individuals holding the SPSM Certification save their employers an average of $220,206 more per year than those who have not enrolled in the Senior Professional in Supply Management Program. In addition, purchasing and supply management professionals possessing the SPSM Certification earn an average of $14,188 more per year than those who do not possess it. As of January 2009, the SPSM Certification has been earned or is being pursued by purchasing and supply management professionals in over 80 countries around the world. Large numbers of the participants felt that earning a certification will help purchasing and supply management professionals get better job, more respect, and higher pay.

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Section VII: About The Authors & Sponsor

Primary Author Charles Dominick, SPSM is the President and Chief Procurement Officer of Next Level Purchasing, Inc., based in the suburbs of Pittsburgh, Pennsylvania. Through the online purchasing and supply management classes that he has developed for Next Level Purchasing, Charles has trained purchasing and supply management professionals from over 100 countries throughout the world. He is also the creator of the globally recognized SPSM Certification, which was launched in 2004 and has been earned by purchasing and supply management professionals all over the globe in locations as diverse as Indonesia, South Africa, the United States, Singapore, Germany, Qatar, and more.

Charles has taught eBusiness and purchasing classes for Penn State University and the University of Pittsburgh. Charles is frequently recruited to deliver educational seminars for purchasing associations throughout the US. Charles has led Next Level Purchasing to awards and honors including being named to the Supply & Demand Chain Executive 100 in 2007 and 2008 and the Pittsburgh Airport Area Chamber of Commerces Innovative Business of the Year in 2006. He was also named one of Supply & Demand Chain Executives Pros To Know in 2007 and 2008. Prior to founding Next Level Purchasing in 2000, Charles acquired nearly a decade of resultsproducing experience in purchasing at a small manufacturer, a Fortune 500 airline, and an internationally renowned university. Between 2002 and 2005, Charles served on the board of directors of a Pittsburgh supply management association. Charles articles and interviews have been published in the newsletters and on the Web sites of purchasing associations as well as in publications such as Inside Supply Management, Purchasing, Multichannel Merchant, Construction Purchasing, Supply & Demand Chain Executive, Supply Management, Government Procurement, and the Irish Healthcare Materials Management Associations Yearbook. More importantly, the companies that have benefitted from Next Level Purchasings training have had their post-training success stories featured in Purchasing Magazine and Supply & Demand Chain Executive Magazine, including two cover stories in the latter. Charles holds the SPSM Certification and a Bachelors Degree in Business Administration from Duquesne University.

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Supporting Author

Megan Tyrseck, SPSM is the External Relations Coordinator of Next Level Purchasing, Inc. Megan holds the SPSM Certification and a Bachelor's Degree in Business Administration and Economics from Lycoming College.

Publisher & Sponsor Are you struggling to have a rewarding purchasing career? Next Level Purchasing, Inc. was founded to help you. Whether you want to learn about purchasing and supply management by reading free articles, sharpen your skills in a specific area such as negotiation, or earn a valuable certification while getting a comprehensive education in supply management, Next Level Purchasing can help you achieve your personal and professional goals. Next Level Purchasing was founded in 2000 and introduced the SPSM Certification on July 1, 2004. Since its introduction, prestigious organizations from throughout North America, South America, the Caribbean, Europe, Asia, Africa, and Australia have enrolled their purchasers in the Senior Professional in Supply Management Program. Learn more about how Next Level Purchasing can help you have a rewarding career by visiting www.NextLevelPurchasing.com.

Valuable pages youll find on the Next Level Purchasing Web site include: SPSM Certification http://www.NextLevelPurchasing.com/spsm.html Jobs For SPSMs http://www.NextLevelPurchasing.com/purchasing-jobs.php SPSM Certification Success Stories - http://www.NextLevelPurchasing.com/spsm-certification.html Training For Teams http://www.NextLevelPurchasing.com/purchasing-training.html Free Purchasing Articles http://www.NextLevelPurchasing.com/free.html Next Level Purchasing, Inc. P.O. Box 1360 Moon Township, PA 15108 United States of America Phone: 1-412-294-1990 Email: help@nextlevelpurchasing.com 15