Procurement: Ask the Experts

Procurement is often seen as a dirty word focusing only on price and terms rather than fit for purpose and value for money.

Jacqui Kavanagh shares her thoughts on procurement and suggests the following approach…

Commercials

Be clear and transparent on your commercial proposition. There is a fear that someone will come in and it will immediately cost the company money whilst they lose control. Try offering a pilot with some key deliverables.

People

One of the biggest problems to companies who would like to add a control and process system to their procurement of products is that the people who have been in control of the procurement process have often been doing this outside their job role and they like doing it. I.e. booking venues, buying travel etc.

Sadly, this means that sometimes it is very hard to actually know who is responsible for what as it is such a fragmented approach. The key features and benefits need to demonstrate that whilst the procurement process is being controlled, the selection process can still remain in the domain of these people. Therefore, you are not taking away what could be perceived as a nice or good part of their job.

Selection process by experts

Experts will be invested in that market and will know what the market prices are; whether they are going up or down, what are the trends, what’s hot and what is not! The ultimate decision maker then benefits from that expert advice.

Noise

Searching for goods and services online delivers lots of noise which can be very stressful for already time poor executives that are supporting the sourcing process over and above the day job

Manage risk

It may be very easy to be swayed by slick sales and glossy websites, but without a proper assessment process on suppliers there may be a risk to the business to buying from the wrong company that does not align with your Corporate Governance – e.g. CSR, Human Rights or even current legislation. Also, when people leave then the knowledge and relationship, and sometimes deals, leave with them, reducing control by the company.

Save time

Sourcing products often without knowing a full specification of what is needed due to lack of training is very time consuming and it is hard to quantify the time being spent on this process. Having a procurement process on supplier selection will save time and increase choice as the initial and time-consuming process of selection of suitable suppliers can we done by experts the choice. Matching the strive to the specific requirement then becomes a quality led process to find the fit for purpose.

Transparent process

With the movement of people it’s important to have a strong process that that can be audited and ensure that it keeps delivering value for the company. This then allows the process to be measured which can then be managed.

Visibility of cost savings

Monthly reporting on cost saving that can be drilled down by product or region allows visibility of the where the costing saving are being made these can then allow the market share to be managed.

Audit-able process

The company needs to protect itself and ensure that all purchases can withstand the scrutiny of how the purchasing process is run. This is especially relevant and valuable in compliance led markets

Reduction of numbers of suppliers

Thus allowing for a more refined and managed purchasing system to be managed in the business again delivering cost savings due to process management which does not reduce cost or choice.