New Procurement Management Thinking: From Taylor to Today

There’s been a surprisingly slim body of academic and non-academic research and coverage dedicated to procurement organizational and management structure in recent years. Some of the best thinking in the sector has come out of the non-academic world on a client-specific basis, primarily consultancies and benchmarking firms such as Hackett. Most recently, Spend Matters’ Pierre Mitchell (formerly of Hackett) has been exploring the subject in the context of procurement design, structure and solutions (e.g., software) provisioning and adoption on Spend Matters PRO.

The question of procurement design and structure could not be more relevant given the explosion of new information sources and technology on the purchasing stage in recent years, and the ill-equipped structure of most organizations to consume, share and collaboratively take advantage of this knowledge transformation. In a recent Procurement Leaders blog titled, Procurement and complexity 1: Where complexity starts, Gerard Chick of Optimum Procurement begins to dissect the concept of the changing nature of teams and management amidst the design, structure, and changes taking shape in procurement.

I like the conciseness of some of the thought and summary in his writing. For example, “value creation in business remains the order of the day but where value creation in the past was a function of economies of (industrial) scale: mass production, efficiency in repeatable tasks; now it is achieved by delivering innovation into the business to impact profitability and customer satisfaction. We have in essence moved from economies of scale, to economies from creativity - mass customisation, new products or service improvement to market - where knowledge workers rather than manual workers are deployed to find a solution to perplexing business/customer problems.”

How does this apply to designing new management and knowledge environments for procurement teams to thrive? I’ll tackle some of his and our suggestions for making them real in the next installment in this series.

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