To Whom Should Purchasing Report?My answer: it depends. To whom the purchasing function reports to can be different from company to company, and that’s OK.
To simplify it, if the company sees Purchasing’s primary role as delivering cost savings, the company generally positions Purchasing under Finance, reporting up to the Chief Financial Officer. If the company sees Purchasing’s primary role as supporting operations (through assuring continuity of supply, reducing risk, etc.
), then the company generally positions Purchasing under Operations/Supply Chain Management, reporting up to the Chief Operations Officer or VP of Supply Chain. As another generalization, in manufacturing I see Purchasing more commonly reporting to Operations/Supply Chain Management and in service industries Purchasing more commonly reporting to Finance.
Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016.
He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations.
Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals 16 Oct 2014 - “If you have strategic sourcing reporting to finance, what do you get? You get purchase price reduction. What else do you get? Nothing. You get .