I was speaking to a group of home builders several months ago and was blown away by how many of them said that they “forgot about purchasing.” Purchasing, the key to cost control, was left to run on its own while all the focus was put on sales and production.

Studies show that a well-run purchasing and estimating department can increase your profits anywhere from 3% to 8%. In a time when we are trying to introduce new, lower priced products that homebuyers can actually afford with these crazy interest rates, how important is your purchasing department?  

Your purchasing department is your first line of defense against cost creep. They are instrumental in reducing variances, keeping qualified trades on the job, and estimating cost on that new product you want to roll out. For this all-important first line of defense, how much time have you spent training them? We tend to hire people for purchasing and say “good luck, someone will show you the ropes” and not take the time to invest in them and what they are doing. The truth is, you can’t afford what it’s costing you to NOT invest in them.  

If you want to lower your costs and increase your sales and your profits, it starts with purchasing. Our popular Art of Purchasing seminar provides purchasing teams with proven strategies and tools they can use to streamline processes to improve efficiency, increase accuracy, and maximize profits. 

Our next Art of Purchasing seminar is in Atlanta, January 8-9, 2024. Click here for details. Don’t miss this opportunity to invest in your purchasing team. The return on investment is substantial.

Kim Dickson is a consultant at Shinn Consulting. She is passionate about people and processes. Her areas of expertise include purchasing, negotiations, processes, scheduling, and quality control.