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Decoding Purchase Function

20th Feb, 2019
Decoding Purchase Function

Born to a highly educated scientist father, Sumesh Goswami spent his childhood in Hawaii, USA.  His family moved back to India when he was a teenager and later when the opportunity to take up US citizenship came, he rejected it and chose to live in India. At the age of 18, he started his own business of selling cement. Forced to resume his studies, he completed his B.Com and ICWA. He began his career in Finance in 1986 and joined Cadila 23 years later. He now heads the Purchase function as Senior Vice President.  In a candid talk, he opens up about his journey as an individual and professional and gives an insight into the purchase function.

Tell us a little about your journey with Cadila. What have been your key achievements so far?

My journey with Cadila began in September 2009 as Vice President, Finance for Manufacturing and R&D in Dholka. The plant was running in 3 shifts for 6 days a week. After studying the volumes and capacity, I was determined to achieve volumes through working 5 days in 2 shifts. I made this happen with support from the Production and Supply Chain Management teams and subsequently the plant was working 5 days in 2 shifts successfully for nearly two years. My next role was as Finance Controller for Chemical SBU which saw significant growth during my tenure of four years. In December 2014, I was moved to Purchase as its Head.It was a challenge for me as I had handled Finance all my life. But I took this as an opportunity and have successfully managed this function bringing in huge savings by way of planned and strategic purchases and aggressive negotiations.

What is the role and impact of the Purchase function in the organization?

Cadila is in the business of manufacturing and supplying pharmaceutical goods i.e. bulk drugs and medicines. To manufacture these, a huge variety of raw and packing materials and several types of consumables are needed. We procure and provide all these requirements and enter into big projects. The Purchase department is the backbone of the business.

What type of challenges do you face and what kind of corrective steps are taken?What is the type of support you solicit internally?

The main goal of Purchase is to procure the best quality material at the lowest price and on time.We deal with over 5000 suppliers in both India and around the world. We face issues of delay in delivery or poor quality material. We are very selective in choosing our vendors and those who repeatedly default in their delivery commitments are left for other better vendors. If we receive material that is not as per our required quality, we take CAPA from them to ensure that the quality issue gets resolved permanently. We have a record of supplying over 99.50 percent good quality material. We need Finance department’s support to release the vendor payments on time and support from R&D, QA and QC to qualify the vendor andmaterial.We have a very extensive process of material and vendor qualification.

What are the top attributes to succeed in Purchase? How do you stay updated about recent developments?

To succeed in Purchase, one must be skilled in negotiation, decision making, relationship building, risk taking and communication. The key principles of smart negotiation are to know your product fully, i.e. its finished use and its raw materials. It is important to understand the internal client’s need and the basis of the product’s cost. We maintain good relations with all our vendors. While we talk to them about business, we try to gather information about the market that may be useful for us. The department gets together every Saturday for a weekly meeting wherein we share knowledge with each other.

What’s your leadership style? How do you maintain work-life balance for yourself and your team?

We maintain a healthy environment.  If an individual is facing a problem, the team gets together to resolve it. Every problem is the team’s problem and the team’s problem is my problem.  So no person feels left out.  I ensure the Purchase team gets to have a good work-life balance. We believe in hard work and finishing our job on daily basis within the working hours. This simple rule enables everyone to go home on time and take required leave to fulfil social obligations or go on vacation.