Book Review: Leading Procurement Strategy – Driving Value Through the Supply Chain

I have found this the most difficult to review of any procurement book I've ever gone into print about over the years. That is in part because (to its credit) it is a book that attempts to cover a wide and important field, with some depth and academic rigour. So there is a lot of content to consider. It is also because it has six different authors. Three get their names under the title - Carlos Mena, Remko Van Hoek, and Martin Christopher, all distinguished academics and thinkers in the procurement world. But there are three other significant contributors as well, so that makes it less consistent in both style and quality than most books in our field.

The overall theme is "procurement strategy,” but it does also beg the question of why some topics are in and others not. For example, "Strategic cost management" forms an interesting chapter from Dr Lisa Ellram, very practical actually, but I’m not clear what makes it strategic rather than just being “cost management,” or why it is included and "strategic category management" isn’t. Was it based around topics the various authors wanted to write about?

But I'm not complaining really about the mix, you can't cover everything, but it does mean that most readers will judge the book on the strength of the individual chapters rather than as a coherent whole. Given this, the main problem is the variable quality of the book. Some chapters are excellent; some pretty good, and a couple very disappointing. Indeed, in one case I would recommend you should not read the chapter; you may end up with less useful understanding of the topic than you did before you started.

And indeed the frustrations weren't just at this macro chapter level. Right from the beginning, I found myself literally shouting "no" at errors in the book every now and again. A bit weird when you're reading it on the train to Manchester, I know. So on page 4 we have this.

Walmart spends around 75% of its revenues on sourcing the products it sells to consumers. This means that every £1 saved in purchasing is equivalent to about £3 in additional sales.”  

No it doesn’t. Those two statements are totally unconnected – you need to know the incremental margin on those sales of course before you can work out a purchasing equivalence. The percentage of revenues is nothing to do with that. So if the incremental margin on £3 of sales is £1, then that is equivalent. If the incremental margin on £3 of sales is only 20p, it is not.

That might seem minor, but this looks like it is presented as a reference book, badged by CIPS, so these mistakes are important. Take another example closer to (CIPS) home. The CIPS Markit Purchasing Managers Index is presented as a pricing inflation indicator alongside the RPI and CPI. It is not. By the way, there is no point looking for “CIPS” in the index – it does not have a listing. Neither do savings, measurement, nor CSR, three subjects chosen at random - I kept looking in the (not very helpful) index for topics and being disappointed even though they are covered in the book.

Back to errors. On page 51 we have a flow chart of procurement process showing “Generate PO” (purchase order) coming after “Supplier delivers” and “Receive goods”!   Not in any good practice organisation I’ve seen. Later on we have Hubwoo described as an “exchange” providing “sourcing and supplier management in energy industries.” Really? (But more on that technology chapter later).

I do wonder whether the authors read each other's chapters - I would have expected some of this to be picked up if they had done so, or if an overall editor had gone through the whole thing with a close and informed eye.

However, let's accentuate the positive. Much of the early sections on procurement strategy and alignment with the business are excellent. Van Hoek uses his own thinking alongside examples from leading practitioners (mainly from speeches at conferences, I reckon) in a clever way to illustrate his points. I recognised good material I have heard from CPOs such as Eva Wimmers of Deutsche Telecom and Thibaut Eissautier of Diageo. His chapter “From Cost to Value in Procurement” is also excellent, with lots of nodding from me here rather than shouting!

Other chapters such as those on risk management, sustainability and SRM are all good, with a level of detail that is appropriate for a senior level person - without of course the detailed "how to" that you would get from a longer more specific work on those topics, such as Jonathan O'Brien's SRM book or Dick Russill on risk, for instance. But the trick of being “strategic” whilst having enough detail to be useful is pulled off well in several chapters.

So overall, this is both a frustrating book and a valuable addition to the procurement library, although not cheap at £44.99.  And more to come on its strengths and weaknesses in part 2 of our review.

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