Procurement Excellence – Weathering The Storm
Procurement excellence – where to start?
How do you define and measure procurement excellence?
Procurement Excellence Starts with the End in Mind
Let me start with the end in mind.
All round business success is the outcome of procurement excellence.
Did you note – I dared to use the words “all round”. Or, as we used to refer to it “win-win” outcomes. Business success with balanced outcomes.
A scenario where only one party gains at the detriment of another, is not a reflection of excellence or success. A scenario where the focus in only on short term gains with limited long term vision and strategy – you got it. Also not procurement excellence.
Procurement excellence is the end result of a collaborative, courageous, break down barriers focus and drive – an end result for both the buyer and the seller.
” Excellence means accepting only the best, and understanding that when it is not given that you, as the leader, are at least partly responsible.”Excerpt from Redefining Excellence for Today’s World
Culture meets Vision
So, I have worked in different industries, different countries and different cultures. And for the past three plus years, I have been running my own procurement firm. Running my own business allows me to work in the procurement field in both the area of the buyer and the seller, experience both the good and the not so good of procurement.
Who does really well?
Those organisations where there is a strong culture of excellence in all areas and leaders with the courage not only to create a vision but deliver the vision. Living the vision and building a culture of excellence.
Which organisations fall in the not so good category?
Those stuck in the time warp of closed doors, no access and do-not-speak-to-us mentality. Vision and values on the wall in itself will never be good enough.
You need a lived culture of vision, leadership and excellence.
Strong leadership and Procurement Excellence
Business will not achieve procurement excellence without strong leaders. Leaders become strong when mentored and supported. Leaders will not succeed in isolation.
The development of leaders is critical for delivering procurement excellence.
A tree will not survive the storm, if it does not have strong roots.
It may suffer damage from bad weather but if the foundations are strong, the tree will recover.
Same with your leaders.
Procurement excellence demands strong leaders. Strong leaders require mentoring, support and development.
Where people are shoved into procurement without proper training, skills and understanding there will be no excellence.
Clear objectives, strategy and goals
Really start with the end in mind. Too often in procurement, we get stuck in the doing, managing the transactions and ticking the boxes.
Set the direction, but allow your procurement leaders to take ownership for delivering results.
Understanding the importance of building good relationships
Good, solid business relationships lead to solutions that benefit both the buyer and the seller.
Business cannot operate in insolvent conditions – yet, many larger organisations still have payment terms that are extensive. A take it or leave it approach. Don’t play with the big boys if you cannot handle the punch.
Are we talking about the big boys or the big bullies? Whatever it is, it is not building good relationships and it is not conducive to the creation of solutions that benefit both parties.
Breaking down the barriers to procurement in order to achieve procurement excellence
Not everybody will win the race. But break down the barriers to procurement. The unnecessary obstacles and road blocks.
Yes, we know you cannot speak to every supplier that wants to pitch their business solutions, but why not have an open day – with an open mind? See what is happening in the world outside your closed door?
Success in procurement relies on the ability of the procurement leaders to break down the barriers that have so conveniently been put up over time.
Dare to ask “why” at least three times every day. And really think about the answer. Just imagine what you will learn.
Discretion and judgement
Procurement is one of those areas where automation and artificial intelligence will remove a lot of the slog and transactional stuff that procurement surround itself with. Thank goodness for that too!
Therefore, we do need to teach our procurement teams to become more aware, work out the what’s and why’s of what is happening, to be able to interpret trends and to apply sound judgment to decisions. The areas where we can really make a difference.
But if your people do not even know what is happening in the world of innovation and technology, how will they adapt and be ready for the change?
Make a start, be procurement leaders and outcomes will follow
Too often, procurement leaders get bogged down by the daily slog. We measure productivity in how busy we seem and not the outcomes we achieve. To do this, there will be an outcome?
But will you be able to call it procurement excellence? Well, maybe only if you are born under a lucky star.
Procurement excellence takes time. Procurement excellence requires:
- The right culture;
- Procurement leaders with vision;
- Strong leadership;
- Clear objectives, strategies and goals;
- Understanding the importance of building commercially sustainable relationships;
- Courage to break down barriers;
- Patience, perseverance and sometimes just a sense of humour.
If you need help with developing procurement excellence in your business, working with your procurement team, please feel free to contact us for more information on what can be done.
Have a great day!