The 2012 Purchasing & Supply Management Career & Skills Report

The 2012 Purchasing & Supply Management Career & Skills Report

Table of Contents
Section Section I: Purchasing & Supply Management Career & Skills Report Overview Section II: Cost Savings & Avoidance Statistics Section III: Purchasing & Supply Management Skill Facts Section IV: Purchasing & Supply Management Career Considerations Section V: Summary Section VI: About The Authors & Publisher Page 1 6 7 9 11 12

The 2012 Purchasing & Supply Management Career & Skills Report

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 2,500 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 January 2012. 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 10.4 years. Fifty-six 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. Table 5 illustrates the industries in which the participants work. Table 6 illustrates the gender 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 Under 20 20 - 29 30 - 39 40 - 49 50 - 59 60 or over 1 Percentage of Participants 0.3% 18.5% 34.1% 27.1% 16.8% 3.2%

The 2012 Purchasing & Supply Management Career & Skills Report

Table 2 Job Titles of Participants Percentage of Participants 4.7% 30.2% 35.0% 8.1% 2.0% 0.7% 1.0% 1.7% 2.3% 4.8% 2.6% 7.0%

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

The 2012 Purchasing & Supply Management Career & Skills Report

Table 3 Geographical Locations of the Participants

Location Africa Asia North America Europe South America Australia

Percentage of Respondents 38.3% 31.2% 19.6% 7.4% 2.1% 1.2%

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% 26.6% 44.6% 13.8% 13.0% 1.1%

The 2012 Purchasing & Supply Management Career & Skills Report

Table 5 Industries in Which the Participants Work

Industry Government Offices & Services Oil & Petroleum Education Construction Business Services Telecommunications Food Manufacturing Consumer Goods Manufacturing Engineering Services Motor Vehicles Medical Providers Warehouse & Storage Chemical Production Mining Metal Products Electrical Components Industrial Equipment 37 Other Industries

Percentage of Respondents 8.1% 6.7% 4.9% 4.8% 4.3% 3.8% 3.7% 3.6% 3.6% 3.6% 2.9% 2.6% 2.6% 2.6% 2.4% 2.4% 2.3% 30.2%

The 2012 Purchasing & Supply Management Career & Skills Report

Table 6 Genders of the Participants

Gender Male Female

Percentage of Respondents 73.4% 26.6%

The 2012 Purchasing & Supply Management Career & Skills Report

Section II: Cost Savings & Avoidance Statistics

While different purchasing and supply management departments have different goals, one common goal among most of them is to achieve cost savings and avoidance. As part of this research, Next Level Purchasing collected data about cost savings and avoidance. Table 7 illustrates the various cost savings and avoidance statistics gathered. In order to put the cost savings and avoidance numbers in context, it should be noted that the average annual revenue of the employers of the participants is $3,089,468,644. Table 7 Annual Cost Savings & Avoidance Statistics Category Overall If SPSM-Certified If not SPSM-Certified As a percentage of employees salary By continent Average Annual Cost Savings & Avoidance $2,582,967 per person $3,213,722 per person $2,551,758 per person 2,228% Australia/Oceania: $4,649,357 per person Asia: $3,292,181 per person North America: $2,975,285 per person South America: $2,932,680 per person Europe: $2,419,208 per person Africa: $1,677,045 per person 0-10: $1,425,178 per person 11-20: $2,068,225 per person 21+: $3,965,306 per person Associates Degree or none: $2,096,780 per person Bachelors Degree: $2,263,086 per person Masters Degree or PhD: $3,583,152 per person 0-5 years: $2,019,317 per person 6-10 years: $2,183,653 per person 11-15 years: $2,839,592 per person 16+ years: $3,785,076 per person

By annual hours of training

By degree status

By years of experience

For a breakdown of annual per person cost savings and avoidance by industry, see Exhibit A.

The 2012 Purchasing & Supply Management Career & Skills Report

Section III: Purchasing & Supply Management Skill Facts

Most Important Skills With purchasing and supply management departments having the ability to contribute cost savings and avoidances to their organizations and the rising expectations to do just that, it should be no surprise that todays purchasing and supply management professionals need better skills than they had in years past. The participants were asked to identify the most important skill in purchasing and supply management. The participants identified Sourcing & Supplier Selection as the most important skill. Negotiation, which held the top spot in five of the last eight years, placed second. 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. The need for continuing education is evident in the sustained high number of hours a purchasing and supply management professional devotes to training in a year. The average purchasing and supply 7

The 2012 Purchasing & Supply Management Career & Skills Report

management professional participates in 22.5 hours of training annually. This represents a nearly identical result as the previous years average of 22.8 and a maintaining of a steep climb in annual training hours that began in 2006 and now appears to have been only temporarily interrupted by the global economic turmoil of 2008. This trend is illustrated in Chart B. Chart B Hours of Training

Training Per Year

25 24 23 22 21 20 19 18 17 16 15 Hours

Hours of Training

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 18 18 18.3 17.4 18.5 20.4 19.6 21.3 22.8 22.5

The rise in annual training hours per purchasing and supply management employee over the past 10 years was the result of both more individuals being trained and individuals getting more training. Consider that the percentage of respondents who reported receiving training increased to 81.6% in 2011 from 75.5% in 2008 and the percentage of respondents who reported receiving 80 or more hours of training annually increased significantly to 7.1% in 2011 from 1.8% in 2008. Online training, also referred to as e-Learning and often regarded as the most cost-effective approach to education, continues to be popular with this years participants reporting that theyve participated in an average number of 1.8 online classes taken in the past year. This is a 12.5% increase over the previous years average of 1.6 and over double the average number of online classes taken seven years ago (0.75). Indications are that online training will become even more popular in 2012 as the respondents expected to take an average of 4.28 online classes in the 12 months following the survey.

The 2012 Purchasing & Supply Management Career & Skills Report

Section IV: 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 achieved an average of $3,213,722 (US) per person in annual cost savings and avoidance for their employers compared to $2,551,758 for those who have not earned the SPSM Certification a difference of $661,964. 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 and avoidance 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. As no surprise, the vast majority of participants felt that certification in purchasing and supply management will become more important in the next five years as illustrated in Table 8. Table 8 Change in the Importance of Certification in Purchasing & Supply Management in the Next 5 Years Percentage of Participants Who Expect This Result 71.3% 26.2% 2.5%

Result Certification will become more important Certification will remain as important as it is today Certification will become less important

Individuals Embracing Skill Development Are Rewarded While the preceding section 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 $21,151 higher than those who have not earned the SPSM Certification. Additionally, the survey revealed that those who have earned the SPSM Certification earn an average of $16,942 per year more than purchasing professionals who have a certification other than the SPSM Certification.

The 2012 Purchasing & Supply Management Career & Skills Report

The Business Case For Certification 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 81% of purchasing and supply management professionals get some level of training within a years time, even managers The average company annually budgets $3,196 for training for each purchasing and supply management employee (see Exhibit B for a more detailed per purchasing employee annual training budget by industry breakdown) 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 9 which indicates the results that survey participants would expect to get after earning a certification. Table 9 Expected Results From Certification (out of 1,942 responses to this question, participants could select as many results as they felt were applicable) # Participants Who Expect This Result 652 742 1,022 1,136

Result 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 a promotion 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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The 2012 Purchasing & Supply Management Career & Skills Report

Section V: Summary
The Next Level Purchasing Association conducted a survey of over 2,500 purchasing and supply management professionals in January 2012. The average participant had 10.4 years of purchasing and supply management experience and the majority of participants supervised other purchasers. With many recent changes in the profession, purchasing and supply management professionals are devoting more time to education than they did in the preceding decade, spending an average of 22.5 hours a year on training. More and more of that training is being accessed online, with the participants engaging in an average of 1.8 online classes in the past year. The participants consider sourcing and supplier selection 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 $661,964 more per year than those who have not earned the SPSM Certification. In addition, purchasing and supply management professionals possessing the SPSM Certification earn an average of $21,151 more per year than those who do not possess it. As of February 2012, the SPSM Certification has been earned by purchasing and supply management professionals in 77 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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The 2012 Purchasing & Supply Management Career & Skills Report

Section VI: About The Authors, Sponsor & Publisher

Primary Author Charles Dominick, SPSM, SPSM2 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 mastermind behind the globally recognized SPSM and SPSM2 Certifications, which were launched in 2004 and 2009, respectively, and have been earned by purchasing and supply management professionals all over the globe in locations as diverse as India, South Africa, the United States, Singapore, Germany, the United Arab Emirates, 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 companies and procurement institutions throughout the world. Charles has led Next Level Purchasing to awards and honors including being named to the Supply & Demand Chain Executive 100 in each year between 2007 and 2011, the Pittsburgh Airport Area Chamber of Commerces Innovative Business of the Year in 2006, and the Better Business Bureau of Western Pennsylvanias Torch Award for Marketplace Ethics in 2011. He was also named one of Supply & Demand Chain Executives Pros To Know every year between 2007 and 2012. 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 is the co-author of The Procurement Game Plan: Winning Strategies and Techniques for Supply Management Professionals, and his articles and interviews have also been published in the newsletters and on the websites of purchasing institutions 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, the SPSM2 Certification, and a Bachelors Degree in Business Administration from Duquesne University.

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The 2012 Purchasing & Supply Management Career & Skills Report

Supporting Author Megan Tyrseck, SPSM is the Manager of Marketing, Operations & Communications for Next Level Purchasing, Inc. Megan holds the SPSM Certification and a Bachelor's Degree in Business Administration and Economics from Lycoming College.

Publisher

Are you struggling to have a rewarding purchasing career? The Next Level Purchasing, Association 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, the Next Level Purchasing Association can help you achieve your personal and professional goals. Next Level Purchasing was founded in 2000, introduced the SPSM Certification on July 1, 2004, and launched the SPSM2 Certification on July 1, 2009. 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 SPSM2 Certification http://www.NextLevelPurchasing.com/spsm2.html Jobs For SPSMs http://www.NextLevelPurchasing.com/purchasing-jobs.php SPSM Certification Success Stories - http://www.NextLevelPurchasing.com/spsm-certification.html Online Purchasing Courses http://www.NextLevelPurchasing.com/purchasing-courses.php 13

The 2012 Purchasing & Supply Management Career & Skills Report

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

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The 2012 Purchasing & Supply Management Career & Skills Report

EXHIBIT A: AVERAGE ANNUAL PER PERSON COST SAVINGS & AVOIDANCE BY INDUSTRY
Industry Accounting Services Apparel and Fabric Manufacturing Appliance Manufacturing Beverage Products Business Services Casinos, Racetracks and Amusement Cement and Concrete Products Chemical Production Commercial Machinery Commercial Printing Communications Equipment Computer Design Services Computer Equipment Construction Consumer Goods Manufacturing Control Instruments Cosmetic Goods Education Electrical Components Electronic Shopping Engineering Services Family and Personal Services Farming and Agriculture Financial Institutions Food Manufacturing Food Service Government Offices and Services Grocery and Drug Stores Hotels Industrial Equipment Insurance Legal Services Management Consulting Services Medical Equipment Medical Providers Metal Products Mining 15 Per Person Cost Savings & Avoidance $ 1,190,009 $ 9,097,440 $ 4,633,750 $ 753,720 $ 1,414,614 $ 6,000,000 $ 476,597 $ 402,300 $ 1,463,154 $ 1,764,000 $ 12,896,779 $ 249,012 $ 1,692,136 $ 7,733,083 $ 2,446,466 $ 750,000 $ 3,351,760 $ 502,500 $ 1,556,270 $ 50,001 $ 1,271,344 $ 80,000 $ 2,725,642 $ 3,733,770 $ 2,981,002 $ 985,907 $ 1,990,005 $ 6,000 $ 582,316 $ 913,803 $ 701,667 $ 200,005 $ 4,105,787 $ 2,072,650 $ 3,948,905 $ 1,464,938 $ 3,378,631

The 2012 Purchasing & Supply Management Career & Skills Report

Motor Vehicles News Providers and Libraries Oil and Petroleum Pharmaceutical Manufacturing Plastic Products Pottery and Glass Products Power Generation and Distribution Publishers Real Estate Religious and Professional Organizations Scientific Research and Development Software Providers Telecommunications Transportation Providers Warehouse and Storage Wood and Paper Products

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

3,875,311 205,715 2,376,205 6,078,938 788,127 100,000 3,971,850 1,001,904 224,520 158,714 40,000 1,089,708 4,333,390 532,981 17,225 860,705

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The 2012 Purchasing & Supply Management Career & Skills Report

EXHIBIT B: PER PURCHASING EMPLOYEE ANNUAL TRAINING BUDGET BY INDUSTRY

Industry Accounting Services Apparel and Fabric Manufacturing Appliance Manufacturing Beverage Products Business Services Casinos, Racetracks and Amusement Cement and Concrete Products Chemical Production Commercial Machinery Commercial Printing Communications Equipment Computer Design Services Computer Equipment Construction Consumer Goods Manufacturing Control Instruments Cosmetic Goods Education Electrical Components Electronic Shopping Engineering Services Family and Personal Services Farming and Agriculture Financial Institutions Food Manufacturing Food Service Government Offices and Services Grocery and Drug Stores Hotels Industrial Equipment Insurance Legal Services Management Consulting Services Medical Equipment Medical Providers Metal Products Mining 17 Per PersonTraining Budget $ 2,941 $ 1,367 $ 1,058 $ 2,799 $ 4,892 $ 2,000 $ 1,678 $ 2,688 $ 1,138 $ 2,300 $ 1,383 $ 1,313 $ 1,423 $ 3,496 $ 4,430 $ 667 $ 2,868 $ 2,945 $ 2,093 $ 5,001 $ 3,048 $ 2,061 $ 777 $ 5,509 $ 2,467 $ 985 $ 3,497 $ 1,806 $ 697 $ 3,353 $ 1,100 $ 1,750 $ 1,630 $ 934 $ 1,763 $ 4,433 $ 4,925

The 2012 Purchasing & Supply Management Career & Skills Report

Motor Vehicles News Providers and Libraries Oil and Petroleum Pharmaceutical Manufacturing Plastic Products Pottery and Glass Products Power Generation and Distribution Publishers Real Estate Religious and Professional Organizations Scientific Research and Development Software Providers Telecommunications Transportation Providers Warehouse and Storage Wood and Paper Products

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

3,303 350 6,176 1,632 1,685 100 5,002 2,184 7,735 2,230 2,643 1,667 5,413 3,322 1,410 1,980

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