Traditionally, buying was approached formulaically, with the buyer getting a minimum of three prices and then choosing the cheapest. Buyers worked from drawings and specifications with site personnel to determine requirements.
Today, however, buying is all about working at a rapid pace to secure unique materials at the best-valued price — often in lightning-fast time for several different multi-million pound projects. Today’s buyers must ensure orders and subcontracts are not only within budget, but can be delivered promptly.
The calibre of products along with safety and environmental concerns mean the buyer may prefer a supplier who is not offering the cheapest price.
To be a successful buyer, you need to be a strong organiser with good negotiation skills to get a good rate and good general knowledge of the industry to understand the material requirements. For example, would 20 or 200 labourers be required for that particular week? You will need strong attention to detail to monitor orders or check invoices and a good list of contacts built up over time.
Adam Kohl of Hays Montrose Luton says: “In a typical day, a buyer would talk to the quantity surveyor regarding materials required, his or her suppliers and subcontractors for quotes and ordering of materials, the site manager to confirm deliveries have arrived on site and a recruitment agency for any staff requirements.”
Purchasing power
According to Kohl, material buyers often progress from material buying into sub-contract buying, or into sales, learning on the way how to take into account commercial, legal and contractual issues. For example, he or she may be required to negotiate a further 10% to meet commercial requirements, order a certain grade of cement or a certain quota of a material as agreed in a contract.
All a far cry from 20 years ago. As Richard Laidler, a chief buyer with 27 years’ experience says, purchasing was not considered a profession when he started out. “Contractors saw surveying and site-management as professions, but not purchasing.
“Over the last 20 years packages have become far more complicated. For instance, buyers used to order from a bill of quantities. Now they have to take into account complex construction packages, such as design and build and partnering work. Good buyers need to have a really broad and experienced knowledge of the market to take advantage of these types of contracts and to make savings.”
Grand nationals
National buying agreements have changed the buying role. They’ve become the norm for the buying of standard materials such as plaster or sand. They are set up commonly by the chief buyer in order to eliminate the need to negotiate constantly for materials for regular projects.
Packages have become far more complicated
richard laidler, CHIEF BUYER
Laidler says that between a third and a half of materials are covered by national agreements for big contractors, while smaller contractors tend to operate more on a local level.
However, national agreements can never cover all the materials required, and it is the variety of projects that sees a buyer in their element.
Most buyer candidates tell us they would prefer to work for a small to medium-sized company where they will have more flexibility.
However, buyers working for major contractors responsible for both materials and subcontract buying find national agreements very beneficial as they can dedicate more time to the bigger values involved in subcontract buying.
However, national agreements may not be around forever. “Things tend to go in cycles,” says Laidler. “A lot of bigger companies have gone for national agreements, but in three or four years they may find that it will be beneficial to use a buyer’s knowledge of the local market to get the best value.”
Up the ladder
So, what are the job prospects for buyers in today’s market? Generally, the number of buying positions is increasing. Kohl suggests the role may be a popular one for candidates as a buyer can move between various industries, from construction to engineering to manufacturing, whereas a quantity surveyor can only work in construction-specific roles.
Companies do recognise the importance of buyers and are paying them accordingly. For example, an assistant buyer new to the industry in central London typically earns £23,000, while a senior buyer would expect £35,000.
For career advancement, buyers tend to move from materials buyer to subcontractor buyer roles. Good subcontract buyers are hard to come by and as such can earn £40k plus.
Buyer’s guide: from the inside
Richard Laidler, chief buyer for CPL Contracting, warns against national agreements and urges more in-house training for buyers Career Sketch:Laing Construction: 1975-95, starting as a trainee and progressing through to superintending purchasing officer, finishing as a senior team leader responsible for managing up to eight buyers. Lanview Ltd: 1995-2000. Company turnover increased from £2.5m to £10m. Responsible for all purchasing from £50k to £2m subcontract and materials. J J McGinley: 2000 – September 2002. Senior buyer, working in a small team with an annual spend of £7-£8m, subcontract and materials. October 2002 – now: CPL Contracting - chief buyer, placed by Hays Montrose last month. Responsible for all purchasing of materials and subcontract packages. He commands a good salary for the Home Counties: £38k plus a £3k car allowance. Over the last 20 years, do you feel buying has developed a more professional image?
When I started buying 27 years ago, it was done from bills and quantities — like shopping list buying. With different types of projects and contracts now, there is plenty more scope for buyers to use their skills in negotiating deals. With the advent of partnering agreements, a fair amount of emphasis is placed onto the buyer to identify the right type of subcontractors to meet those agreements. Is buying considered an important role at the site level?
Yes, I think the sites do see it as an important function as people realise sites need to be cost effective. It is also recognised that they need the right quality of subcontractor on site, so they rely heavily on the buyer to select the right subcontractor to carry out work and ensure materials arrive on site, on time. With more and more subcontractors in the market, it is crucial to make sure the subcontractors are selected correctly. What issues do you feel are affecting the future of the buying role at the moment?
National agreements are affecting a buyer’s interest in the job. One function of the buyer is to know the local market and know what is out there. National agreements stifle this as at a local level as the buyer isn’t able to carry out his buying role. If a contractor uses a national agreement, it loses those local deals, which means you lose money. What’s the best part of being a buyer?
Negotiating, talking to people, sorting deals out and making sure a deal is right both financially and contractually. Advice for those trying to get into buying?
Start at the bottom and learn on the way up. You need overall knowledge of the industry. Go through a proper training scheme. At the moment, very few companies operate training schemes for buyers, so buyers are coming in from other fields. To some extent, buying in this industry is losing some of its professionalism as a result.
Source
Construction Manager
Postscript
Robert Smith is managing director of recruitment agency Hays Montrose
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