We take the view that the design and implementation of a Procurement Strategy must consider demand (and the customers), the organisations processes, and the supply (and the suppliers); these three are the heartbeat for a visionary strategy, an outline follows:
1)Demand side (this comes first, as everything else follows on from satisfying a need from customers); therefore:
1.1.Procurement will champion early involvement with customers and be proactive to meet anticipated customer requirements.
1.2 Procurement will provide customers with value by delivering a quality product at the right time and at the right price.
2) Procurement organisation (here, the structure and process need to be “right” and in alignment with enabling policies)
2.1.Procurement will join with the rest of the organisation in recognising:
- Profit and success only comes from customer satisfaction
- People working with other people run the organisation and its supply chain. How people relate is therefore the key to success.
2.2.Procurement will recognise that the supply chain is a series of internal and external cross-functional processes and procurement will be an active, willing, and leading member of the internal cross-functional structure that connects to all of the external supply processes.
2.3 Procurement will actively encourage and embrace as the norm:
- Selective use of technology, for example, E-commerce, is used as appropriate for the organisation.
- Education and training and professional standing with professional certification will be a requirement, (as is found with accountancy, legal professions etc).
- Measuring of supply lead-time, their improvement and the removal of all supply lead-time variability by negotiating fixed, known and reliable supply lead times with both internal and external parties.
- Outsourcing of all noncore activity, including where required, part or all, of tactical procurement.
- Continuously review its own activities and practice continuous improvement including searching for procurement best practices from all sectors.
3) Supplier side (the third “heartbeat” of a procurement strategy, providing the supply for customers), therefore:
3.1 Procurement will recognise that suppliers are critically important in the provision of new ideas, innovation and value that can increase the performance of the organisation.
3.2 Procurement will share with suppliers a joint common agenda; to meet customer requirements.
3.3 Procurement will be committed to its key suppliers for mutual benefit and gain over the medium to long term and will work together for continuous improvements year on year.
3.4 Procurement will ensure that “fit for purpose,” supplier selection and evaluation is undertaken and that this key activity is not rule bound or covered by restrictive bureaucratic procedures that are now out of date.
3.5 Procurement will be the sponsors of honest and ethical dealing within their organisation. Procurement will not be seen as “the free lunch guys” or will be involved in any corrupt practices and “under the table deals” that denigrate personal morality, an organisation and society.
* For more and how to take forward the above vision then please see Stuart’s book, “Excellence in Procurement Strategy” by Stuart Emmett & Barry Crocker(2013).