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Is profit made when you buy or when you sell?

In South Africa the average bands (in some cases / industries the packages are higher) are:

Sourcing Specialists: R280K - R320K ($40k - $52k)
Sourcing Managers: R420K - R450K ($60k - $65k)
Commodity Managers: R420k - R480K ($60k - $70k)
Procurement Specialists: R280K - R320K ($40k - $52k)
Purchasing Managers: R260K - R280K ($36k - $40k)
Buyers: R130K - R180K ($20k - $28k)
Executives: R500K – R800K ($72k - $112k)




According to the outcome of salary surveys performed by our company over the last few years, remuneration in the procurement arena is fairly broad.

Huge discrepancies appear between industries and job functions.

Industries in the heavy resources environment, on average pay the best, while the government and retail industries have the lowest salaries.

I think it largely depends on the strategic level procurement plays within the organisation. Qualification is also a major contributing factor, and those positions paying the highest tend to employ candidates with secondary degrees.

I have included a basic guideline above. Priscilla

are these packages cost to company?

Naomi I tak it that these are indeed TCC.
I agree totally Priscilla, the role played by procurement in specific organisation has a lot to do with firstly the importance of the position and then secondly the remuniration recieved.

Naomi i have to agree with Izak, those salaries do represent CTC.

It clearly indicates that Procurement/ Purchasing in South Africa is not been used at Strategical level or to its fullest. If it was those salary ranges will be a whole lot higher tha they are..

Totally agree Kaygee, if you go and do some research on international averages in these fields, you will be shocked!!
I hope my manager sees this!!

I would imagine that the actual experience of the incumbent will undoubtedly influence the size of the remuneration package.

Just a perspective from Namibia:

1. Private sector companies apart from corporate entities and multinationals do not really give so much attention to Procurement, let alone to supply chain management as a core and valued entity within the organization and often the salaries band reveal this. You will notice in smaller organizations that these people are simply called buyers and paid peanuts.

2. Semi-owned government entities (aviation, transport, ports, telecommunications, roads maintenance, finance regulatory authorities etc) usually has better alignment with procurement as a profession and often pay well. Buyers are anywhere in the band of 280K - 420 (procurement specialist to inventory controllers and purchasing managers). Cost to company

3. Often what drives the view of how important supply chain is or procurement in the local parlance is that Purchasing is often lumped with stores in a corner somewhere far away from the Head Office and even executive management really do not acknowledge the leading role played by supply chain. I was once introduced to a new Exco member as: "This is ... who takes care of buying stationery and consumables." Yet I was responsible for capital procurement, managing a budget of +_450million dollars (Namibia that is), led sourcing projects and managed the public bidding process for work for the entire organization, submitted Board approvals of capital projects and presented the empirical data on BEE spend and supplier development.

4. What determines your final pay check is how high the profile of supply chain is within the organization and the understanding of that crucial role by executive management. The zero after the 1 or 2 or 3 is then a formality.

Amoa

I am glad some one sees the point i was trying to make. Companies should stop treating Purchasing as an administration department and realise that we add a lot to company been profitable.

Trend in EU market is that you get a CPO( chief Purchasing Officer) reporting directly to MD not the way we do ..Group Purchasing Manager reporting to Financial director.

Yes Purchasing might have in past fallen under finance but now Purchasing is a stand alone department that adds alot of value to total company strategy.

Finance alone can't make decision on make or buy or even outsource services Purchasing is more equipped to do make such decisions.


If companies don't realise this we they are going to end in sitaution like our leading enerygy company and our public sector where there is shortages of skills( because some of us are moving out of the country to where our skills will be highly appreciated and remunerated) and companies will still post good profits but expenses will keep creeping up.

As usual South Africa is totally asleep when it comes to International trends (which dictate that Procurement (not purchasing - there's a phenomenal difference) is a major vehicle of company strategy and an integral part of any organisation) Gone are the days when the purchasing function was done from a dingy,smoke filled room - somewhere in the back offices of the firm.
Organisations (i'm generalising) need to take a more pro-active role in the assimilation of this function into their businesses - along with Strategic Logistics Management (which is also left out of the picture) together it can release untold savings for the organisation.

Once companies realise this, they would be able to enjoy the competitive advantage due to them.

There is no excuse for misunderstanding the role that procurement plays...to some we just buy coffee...which is of utmost importance to any organisation!!! - -my 2 cents........

What do you think the role of Strategic Logistics Management should be within the Procurement organisation? Are people aware that there are 13 activities linked to this that could also aid in the firm being 'best in class' Comments please...