PURCHASING IN THE UTILITIES INDUSTRY

0 Views
THE NATURE OF THE WORK

Work in the utilities industry can be either in the public or private sector. Although most utility companies are privately owned and operate on the basis of contractual agreements with the municipalities that they service, there are still many that are owned and operated by cities and, in a few instances, the federal government. Those in the private sector usually are controlled or monitored by some type of a government commission; however, the purchasing policies are determined by the company.

Purchasing departments in utility companies tend to have several operating sub departments because they are involved in all aspects of the energy system. They manufacture the product, distribute it directly to the consumer, and service the distribution network. Meeting the demands of all of these functions involves the purchasing department in the procurement of a wide range of products and services. The range of products may be further complicated if the company is involved with all of the basic energy sources: electricity, gas, water, and nuclear.



The product classifications range from office supplies to complex nuclear equipment and include such specialized items as substation components, transmission equipment, and sophisticated computer and electronic control equipment.

Since purchasing may include expediting, traffic, service fleet management, inventory control, audit and systems analysis, surplus equipment disposal, and hazardous waste handling departments, there are numerous entry-level positions that can lead to buyer, senior buyer, and department manager or supervisor. The more obvious choices are expediting, inventory control and systems analysis, and many of the companies have well-established buyer- and manager-training programs. A college degree is becoming necessary to progress into management-level positions, and the preferred major concentration is in business or marketing. At the higher levels, an MBA and designation as a certified purchasing manager is preferred.

Because of the variety of products and services purchased, almost all types of procurement systems are used: open market quote, price index, informal and formal bid, and negotiated short and long-term or open end contracts. Consequently, buyers must be familiar with most purchasing systems and techniques. Product knowledge requirements also vary since the engineering department usually develops the specifications for the more complicated technical equipment. Buyers also tend to be extremely quality oriented. Faulty or poor quality equipment results in interruptions of service, a situation that most utility companies try to avoid.

Utility companies in general are monopolies, a status that has the advantage of no competition but the disadvantage of being in the public eye. This high visibility creates considerable pressure, as the public becomes very vocal when service is poor. Sensitivity to public opinion is felt throughout the entire organization, and purchasing is no exception.

Most companies have been in business for a long time and, therefore, are well established and organized. The atmosphere is structured but not unreasonably so. Most purchasing professionals are very comfortable with the amount of flexibility and autonomy found in utilities, particularly in the private sector, because they can respond effectively to emergency situations without being bound by an overly rigid purchasing system.

ENTRY REQUIREMENTS AND QUALIFICATIONS

In terms of desired character traits, you are expected to be self-starting and self-motivated, confident and outgoing, strong under pressure, and even tempered different types of circumstances. In this industry more than most, the ability to think in terms of scenarios is extremely important. Almost every decision must include alternatives or options. One purchasing professional calls these options fallback positions. Although many products are purchased through long-term open-end contracts, alternate sources of supply must always be available.

Most utility companies in the public sector operate under the same general guidelines. Because of their responsibilities in the event of an emergency, their purchasing systems are often independent of the government entity, at least in the area of specialized and emergency equipment. Employment selection and advancement is usually subject to civil service regulations. You should, at this point, be aware that these regulations may differ from one government entity to another, so each position that you consider has to be investigated as to the terms of employment.

The utility industry is very supportive of those employees who wish to supplement their education by taking regular college courses, seminars and workshops. Executives are encouraged to become active in related trade and professional associations and community affairs. Many purchasing professionals belong to the local affiliates of the National Association of Purchasing Managers and actively involve themselves in the association's various committees. Considering their rather unique status as monopolies regulated by commissions or government agencies, it is easy to understand why utilities encourage employees at all levels to become involved in civic and charitable activities. All departments are expected to cooperate in maintaining excellent relations with the general public and the local municipal governments.

WORKING CONDITIONS

Compensation levels are average to above average with excel lent fringe benefits. Employment is stable with above average job security. The work environment is usually pleasant and the facilities well equipped. The work can be very fast paced, particularly during emergencies and adverse weather conditions when priorities are suddenly changed.
If this article has helped you in some way, will you say thanks by sharing it through a share, like, a link, or an email to someone you think would appreciate the reference.