An Interview with America's Number One Purchasing Professional

When Dave Nelson talks, purchasing professionals listen. And for good reason: during his 10 years at Marysville, Ohio-based Honda of America Mfg., Nelson led the growth of the company's purchasing division from 100 to 400 employees and from $600 million...


These are tools. I have a wonderful shop at home, with a three-horsepower table saw. It saws through boards like you wouldn't believe. It'll also saw your thumb off. The point is, these tools typically help you tremendously with efficiency, just like that table saw, but if you misuse them, you're going to saw your hand off.

Every major part should have a written strategy. Then engineers, purchasing people and management can all understand where we are headed with that particular major part. And there ought to be a written strategy for all major suppliers. These two strategies merge, and then you use [e-procurement tools] to optimize those strategies.

iSource: Recently, so-called brick and mortar companies in the automotive, aerospace, retail and other industries have announced the formation of purchasing consortia. Do you believe that these consortia will bear fruit?

Nelson: We have had consortiums since the late 1970s, and they have struggled. Companies have their own specific customs and methodologies of doing things, and it's almost impossible to get a consensus. I think there will be some significant consortia that will work, and the reason that they will work is that if a person puts enough management focus, energy, money and leadership into something, the effort will pay off.

iSource: What will be the long-term impact of e-procurement on the purchasing profession?

Nelson: It causes a greater visibility to your senior management. If your senior management perceives that there is opportunity, that in itself creates greater opportunity for the profession. It creates new, higher-level jobs. Purchasing has had the stigma over the years of just being tactical. Now the tactical work is going to get done through the use of new technologies, resulting in a shift of people in purchasing toward more strategic functions. There will be a far greater balance of people involved in strategic sourcing.

iSource: If you were just starting your purchasing and supply management career, considering the current environment and its varied opportunities, what would you pursue? How would you map out your career?

Nelson: I would get an engineering degree and match it up with an undergraduate degree in supply management. And then I would get a master's degree, with a focus on supply chain management or business administration.

Summers, I'd be an intern or work on a co-op basis. You get to know the company, and whether you really want to work there. And you get to learn the job before you ever even start to work there.

And then I would look for the opportunity to go with one of the best companies. I would pick out the most capable company in supply management. If you want to become really good, you get into a really good department, led by really good people, and you become a team of one of the best.

iSource: How has e-procurement changed your own philosophy regarding supply chain management?

Nelson: The philosophy, in and of itself, hasn't changed one iota. Philosophy breeds strategy, and the strategy breeds the goals or objectives, which breed the tasks that get done to make it all happen. We want more and better products at less cost, and [e-procurement] helps us get there. eProcurement is a tool that will help us to further exploit the concept of supply chain management.

iSource: Has e-procurement changed the way that procurement decisions need to be made, or do the same business rules apply now as applied a few years ago?

Nelson: Exactly the same business rules still apply. One reason companies get guys like me and pay us very well is that typically we have years of experience not just in honing those business skills but particularly in honing those business judgements and what it takes to make them. So a new thing like [e-procurement] pops up, and what do you do? You go learn as much about it as you can. Once you've gathered all the data and information you can process, you then have to take some risk. You can't be afraid to make a mistake. You've got to step out into the deep water, or companies will find other people who will.

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