The Procurement task is pretty straightforward, for a focused, intelligent and engaging professional.
Despite what you read in the job brief or the role description, and regardless of how complex your company tries to make the task sound, let me paraphrase it for you.
Your job is to identify, engage, and manage the best available suppliers, in order to meet or exceed your company’s appetite for external goods and services, as effectively as possible, with the minimum exposure to risk, and to do so better than your company’s competitors.
In doing so, you need to build and continuously develop solid and bilateral relations with your stakeholder colleagues, you need to ensure that your company benefits from market and process innovations, and you need to have the utmost regard for your company’s sustainability objectives.
Finally, whilst practising and honing your skills as a leader and a colleague, you also need to identify and develop your successor.
There. How hard is that?
Well the procurement scientists in the big consultancies will declare that view ‘superficial’, and, of course, ‘the genius is in the detail’, of which there is a considerable amount in the procurement role!
However, in your new role, or new company, just define your strategy to ensure that it meets the company’s goals, build a plan to deliver the strategy, and implement, coping with the normal managerial ambiguity, challenge, and fluidity, as you go.
Why are so many procurement professionals still missing some of the fundamentals, failing to build enough momentum, falling short on competitive edge, missing out on innovations, exposing their companies to undue risk, and failing to win a seat at the top table, to use that hackneyed old cliché?
The answer has been a mystery to me throughout my practitioner and consulting careers, but I think the penny has dropped.
Procurement is about managing multiple challenges and resources, all the time, about spinning as many plates as you can handle, and about continuing to challenge existing practice.
Those who fail, or those who fail to excel, just do not push hard enough, just do not use their intellect and experience to see past the most recent and most pressing urgency. Others become hooked on adopting core systems and practises that inhibit their momentum.
Think of any winning team – a sporting analogy works for most people – and think about the way in which the team leader has to continually experiment with new or modified tactics, to deliver their strategy and ensure that they stay on top and win – think of Mercedes’ recent success, or of some of the stellar achievements in the recent athletics events.
Doing what you or the company has always done is too conservative and pedestrian; slavishly following precedent and history is not enough.
Take the example of our business, where many years’ success as a pure-play procurement consultancy has served us, and more importantly our clients, well – we have numerous examples of companies and procurement people who have prospered under our process expertise, application guidance and outstanding delivery, achieved through the growth of their capabilities and behaviours.
We saw a shift in the market though, and concluded that having all our eggs in the same basket was not enough for the future.
Just like you, we dislike paying money up-front for a service that may or may not bring us a benefit.
Just like you, we get frustrated when we have to pay suppliers’ prices that may or may not be the best we can achieve – but we don’t really know.
And just like you, suppliers who fall short on their promises, exasperate us.
That is why we have applied our expertise in procurement, and our knowledge of supply markets to develop an additional service from our new company, Purchasing-Expert Limited (P-E), to provide a cash-positive, risk-free service, to help our clients focus on the big-ticket items, with confidence that they have delegated a cost-saving task to experts with long experience and success in their field.
P-E takes the burden of managing suppliers for value and cost-effectiveness away from the client, drives savings, without any adverse impact on quality, service or reputation, and provides the client with the benefits.
We recently worked with one client to reduce their business and IT consumables spend of £18,000 by around 30% per annum…then we spotted that their field service engineers were spending the same amount of money on the same type of items…we found 50% savings there too, reduced risk, and improved quality.
One less spinning plate for the client to worry about!
As a procurement professional, you too should be thinking about how well your strategy fits with today’s environment.
One client with whom we have just developed a global strategy to take them towards 2020, told us that he and his team had found our guidance and counsel through the process to be invaluable, and that they could not have done so without us.
We throw down the challenge to all procurement leaders to test whether their strategy is good enough, and whether they are spinning enough of the right plates.
Iain Stewart – December 2014
Iain is a Director of 105 Consulting Limited and Purchasing-Expert Limited www.purchasing-expert.co.uk