Author: Tony O’Connor
Procurement departments in mid-sized and smaller companies have an inherent difficulty. They probably don’t have the spend size in many supply categories to justify employing full-time category specialists. Getting the necessary information to procure and manage well can be a problem.
As a consultant, you get to see inside a lot of companies and organisations. It’s interesting how many times I’ve revisited a procurement department three or five or ten years later to see that the knowledge and expertise that had earlier been built up, in my particular area of corporate travel, has somehow leaked away. I’ve seen this in companies of every size. They had a good chunk of knowledge but lost it.
As a category specialist myself I guess I’m a bit biased. But I don’t see how value can be obtained without good category knowledge, especially when dealing with complicated and fluid supply chains.
There are three ways to get category expertise. You can hire it, scavenge it or insource it.
- If your procurement team can only extend to several people, then you can try hiring a few all-rounders with category expertise in multiple supply areas. But the competition for such people is high. And it’s difficult, without the specialist knowledge yourself, to recognise genuine experts in the areas you need.
- There’s quite a lot of free or low-cost information around, especially from organisations like PASA and industry bodies like GBTA. Some provide substantial resources that can at least get you on your category management way. It can take some searching and digging. Also, I think that better use could be made of suppliers. Strip away the selling and they can deliver plenty of good information. Buyers tend not to avail themselves of this source enough, and suppliers tend to sell too much rather than inform and educate their prospects.
- Then of course there are the guns-for-hire; the consultants who specialise in certain supply chains. If they are any good they should be wellsprings of good information. And the processes and services they deliver should transfer category knowledge to you in generous proportions. Excuse me if my bias is showing again, but consultants can be good value if they deliver the right services in the right amounts at the right time. It means you don’t have to effectively pay for that expertise full-time.
Generalist category managers can be caught between the internal expectation that they know every category very well, and the difficulty of actually being an expert in several supply chains. And with so much to do, time on-the-job for research and learning can be a luxury. A strategy for category expertise acquisition, especially across key supply areas, is possibly a worthwhile exercise, especially for smaller firms.
Having gathered in the knowledge you then have to keep it. The first thing to do is to save every document and bit of information generated by tenders and other activities in a logical place. It sounds obvious, but I’ve been surprised by how often soft-copy things don’t survive the changing of the guards, or even the changing of the seasons. Sometimes, there is a tendency to think that old documents and information will be dated or otherwise of limited value. I don’t think this is true. Suppliers change but not so much the ways of the supply chain itself.
After a tender or other major exercise, there’s naturally a tendency to move onto the next thing. But I think it’s worth a little time to organise the category knowledge just gained from the project. It will entrench the knowledge within the company for easier future use, and it will also help the category manager to become a bona-fide expert.
Or of course you could just hire a consultant!
Tony O’Connor is the Managing Director of Butler Caroye, Australia’s leading independent consultancy specialising in corporate travel procurement. He is also the Deputy Director of GBTA in Australia and New Zealand.
Issues such as Tony raises here will feature in the agenda for ‘Building Procurement Capability’, a PASA Conference scheduled for November 2017 in Sydney. The conference will focus on all aspects of procurement capability, including in-sourcing of expertise. The programme is currently under development so if you have a view on this, or any other topic related to capability, and would be interested in sharing it at the conference, please contact Nigel Wardropper at firstname.lastname@example.org