Exploring A/P and Procurement Best Practices at P&G: Lesson 8

Lesson #8: Whoever Has the Best ‘Hand’ Wins

While this adage pertains most literally to poker, the procurement lesson is really about finding the best resources (e.g., internal vs. external) to execute procurement processes, whether they are "steady-state" or transformational. Processes might be executed by salaried staff, contingent labor, BPO firms and/or suppliers themselves. There is even a rise of a category we have begun to cover on Spend Matters called “procurement managed services,” which falls somewhere in between consultancy, skilled contingency and BPO work.

Managed services can play a role too. But regardless of where the resources might sit in procurement, in the business and/or in a Global Business Services group, the goal should merely be about bringing the best resources and having procurement “practice what it preaches” when it comes to optimizing resources in the value chain – including its own procurement services value chain.

And similar to P&G and other progressive supply organizations, it is a combination of business unit staff, procurement staff, corporate center staff and third-party resources all working together in hybrid forms to make the trade-offs and optimize the whole. It is essential to realize how procurement and finance can provision various services (including their own) alongside potential third-party tools and platforms, which may be delivered transparently to both the internal customer and suppliers.

This post is based on content contained within the following Spend Matters paper: P&G: A Case Study of Supply Management’s “Non-Invisible Hand” in 10 Easy Lessons. The paper is free to download in the Spend Matters Research Library.

See also:

Lesson #1 – No Rest For the Best

Lesson #2 – More Complexity Means More Rocks for the Invisible Hand to Look Under

Lesson #3 – The Invisible Hand Needs to Make Invisible Opportunities Visible

Lesson #4 – Project Participants Must Understand Improvement Objectives and How to Handle Trade-offs

Lesson #5 – The ‘Hand of God’ - Invoice Discounts Can Be Resurrected From the Dead

Lesson #6: Reduce Trade-offs Altogether (Part 1)

Lesson #6: Reduce Trade-offs Altogether (Part 2)

Lesson #7: The Hand Must Be a Helping Hand (Not Brass Knuckles)

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