To Whom Should a Purchasing Manager Report?

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To Whom Should a Purchasing Manager Report?
s chinyakata, Member
What is the best reporting structure for purchasing / procurement managers? Should they report to finance or operations?

Reporting Structure of Purchasing Managers
Phillip J. Ramirez, Member
Definitely not finance, as there could be a huge conflict of interests. There needs to be some sort of separation of duties.
However, I am not sure operations is the correct place either, as you need to have a supervisor who knows how purchasing works (the ins and outs) and can back you up when it's needed.

To Whom Should a Purchasing Manager Report?
Yes, you are right, the finance operation is related to many things including income and saving money, while the purchasing function is related to materials inflow.
So there is big difference the first is looking for profit, while the second is aimed at spending money to buy materials and other assets with high quality.

To Whom Should a Purchasing Manager Report?
Jaap de Jonge, Editor
I think the answer depends on a number of things:
1. The size of the company. In a small or medium size company (s)he will report to the MD or CEO.
2. The main role of purchasing in the company. See Kraljic Matrix. If purchasing is just about buying non-critical items and about saving cost, then probably the purchasing manager would report to the finance department. But if we're talking about a purchasing organization who buys very complex, critical and expensive materials, then probably the purchasing manager reports to the chief operations or supply chain management. I have also met wholesale organizations buying vegatables at auctions, where the purchasing officers were so critical for the profit, that they reported directly to the MC / CEO.
3. The type of company (related to #2). In a manufacturing company you often see them reporting to Chief Operations Officer or Chief Supply Chain Officer. In a service company (e.g. a bank) they would commonly report to the Chief Financial Officer.

Reporting of Purchasing
Mike Flanagan
Purchasing should report to the overall finance department. Basically because you can't buy unless you have money. Pretty simple concept I would think.


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