Metal Purchase Planner: Manager or Scientist?

The following appeared in a report presented for discussion at a meeting of the directors of a company that manufactures parts for heavy machinery:

“The falling revenues that the company is experiencing coincide with delays in manufacturing. These delays, in turn, are due in large part to poor planning in purchasing metals. Consider further that the manager of the department that handles purchasing of raw materials has an excellent background in general business, psychology, and sociology, but knows little about the properties of metals. The company should, therefore, move the purchasing manager to the sales department and bring in a scientist from the research division to be manager of the purchasing department.”

Discuss how well reasoned . . . etc.

In the first part the writer reckons that the falling revenues coincide with delays in manufacturing but fails to establish if it is indeed so. It is presented as a conjecture and a possibility. Unless and until some kind of data or investigation says that manufacturing is definitely the main culprit, it is not wise to do any kind of serious finger-pointing.

Nevertheless we have one thing for sure that there are manufacturing delays. This is definitely not good for the reputation and the revenues. So it may be a good idea to look for a possible solution. This delay may be the cause or just a symptom of the cause. Either way working on it as a starting point may lead to a solution.

The writer identifies with certainty that the cause in manufacturing delays is poor planning in purchasing metals. This poor planning is further attributed to the manager handling the raw material purchase department. The writer concedes that the manager has a good background but lacks knowledge about metals. In order to tackle the problem and apparently use the manager's strengths at the right place the writer proposes transferring the manager to sales department and replacing him with a scientist from the research division.

Although I agree with the initial train of reasoning, I do not find the solution to be convincing at all. Even if metal may be the main raw material for heavy machinery industry it is certainly not the only one. The manager in question seems to have managed other raw materials well but bungled up with metals due to lack of knowledge about metals. There is no complain wrt the manager's people handling skills either. If the manager has displayed acumen in handling other things it is reasonable to assume that he will be able to do the same for metals if given appropriate training. A scientist, on the other hand may be completely inappropriate for the job. Scientific knowledge about metals is not the same as commercial knowledge about metals. Getting metals at right price may entail knowledge about commodities markets, forward contracts, networking and metal market situations. A scientist may be completely out of his depth for such a job, no matter how much he may know about metals. While making a purchase plan for metals one may not know about a metal's melting point but definitely needs to know if there is a meltdown in the commodities market! A scientist without any business acumen or education may also face problems with people management. All in all it may turn out to be a disastrous solution. Hence the reasoning is seriously flawed.

All in all, replacing the manager with some other manager of comparable acumen but with better knowledge about metals may be a good idea. Alternatively the current manager can be trained. Replacing him with a scientist is a bad idea and will not solve the company's problems.