Procurement Has Advanced In 30 Years – But Not That Much!

This was from Supply Management last week, in their coverage of the CIPS SM Awards.

“When I started 30 years ago [procurement] wasn’t really a function, it wasn’t a profession,” said Oliver Cock, chair of this year’s awards judging panel. “To see how far it’s come is amazing, and to see the quantity and the quality of the entries this year has been fantastic.”

Let’s unpick that a little. I know he has to be positive, and it is quite right that he celebrates both the excellence (I assume) of many of the award entries and the progress the “profession” has made, but I’d have to take issue with some of that statement.

I don’t really know Oliver personally, but I see from his LinkedIn entry that he started his career as a graduate supplies trainee in the NHS back in 1987. By 1992 he was “National Purchasing Manager, Medical & Surgical Consumables” for NHS Supplies. So I don’t see how that stacks up with his claim that procurement wasn’t a function or a profession back in those days.  The NHS seems to have been  professional enough to have had graduate trainees and a national category strategy.

Indeed, and somewhat ironically, the NHS is now trying to re-create that “national purchasing manager” sort of role with its new supply chain operating model and tower category strategy, and many people I know in NHS procurement rue the day that NHS Supplies disappeared (and the same goes for PASA). Certainly some procurement practice in the NHS is ahead of where it was in the 1980s, but it’s hard to see it as the step change he seems to suggest.

I was at Mars Confectionery in Slough, running Packaging Buying in 1987, and we were certainly a “function” and pretty “professional” too. And we weren’t alone. Of course, technology has been the biggest change since then, and procurement does have more influence and power in many organisations than it did back in the 1980s, but I think this view that procurement was in the dark ages 30 years ago is pure mythology, designed simply to make us feel good today.

Indeed, in some areas, procurement has gone backwards since then, we would suggest. We’ll have more on that idea in weeks to come actually. Let’s just say that finding a stash of old Supply Management magazines has been rather illuminating …

The other point to make here is that many of the gains for procurement have not come about because of our own efforts, to be frank. I’ve been saying this at various presentations this year – that is has been external largely economic factors that have led to the growth in procurement jobs and activities through my career.

Globalisation for instance and the growth in international trade has driven a greater volume of commercial transactions and hence more “procurement”. But those factors will not and cannot continue in the same way over the next 20 years, so logically procurement cannot benefit in the same way as it has. We’ll pick up on some of those issues too in weeks to come.

My overall message really is that of course it’s fine to say positive things at an event like this, but procurement people, functions and the whole “profession” needs to be on guard against complacency, hubris and arrogance. The next twenty years, even the next five years, will be tough, so let’s make sure we have a call to action as well as a celebration of past glories.

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Voices (4)

  1. Sam Unkim:

    Tim’s story just illustrates the fact, that everyone in the NHS, thinks they are a buyer. Problems like this could be / should be solved by the Trust’s Supplies Dept.

    We know ahead of time, what orders are going to come in short and what new innovative national contracts are failing disastrously (**cough** “Shrouds”) and we have lists of alternative products and alternative suppliers. This means we can solve problems like this “Once” on behalf of the whole Trust.

    And, when all else fails, we hold the Visa card and have the Amazon account.

  2. Tim:

    I was at the hospital yesterday having a cast removed. Whilst there one of the staff (not a procurement pro, a medical pro) was hunting online (googling) for some bandages to buy as they had run out.

    That’s the joined up national thinking of our NHS procurement (aggregation of spend? who needs that!).

    1. Peter Smith:

      Wow! that’s scary. I don’t think that is so much a question of aggregation though – it sounds to be more like a failure of local supply chain management systems. (There might be a national deal but clearly there wasn’t any product available at the sharp end of delivery). Of course, those bandages should be in stock in the hospital – indeed, in stock at ward level I would have thought. Perhaps our NHS readers would like to comment?

      1. Nobby:

        That just sounds odd. Shopping for bandages on Google. As we all know, we use Amazon to source bandages when we run out of stock….

        But, indeed, there was a time when the NHS procurement community managed markets, and demand and supply, through a single, national team, using advanced technology such as spreadsheets. It started to look expensive (so said the politicians and well-meaning civil servants), so they removed chunks of it, and the rest is history.

        Having realised such decisions have been catastrophic on the bottom line of the NHS, it looks like they are building it all back up again. On subject of the ‘procurement function’ and giving the function a meaningful (as opposed to functional) title, one lives in hope that they rename the ‘Intelligent Client Coordinator’ something sensible. We should run a competition as what one would name the IT, HR, Finance functions against the same principle. (The ‘Employing, Managing and Exiting Staff Coordinator’ would be a great one for HR. Does what it says on the tin.)

        Meanwhile, in comparison, IT is very important (obviously) so NHS Digital employs some 5,000+ staff(?), notwithstanding the massive IT teams that are resident in each teaching hospital. (One has 200 staff.) And back to HR (Human Remains), as I recall one DGH saying how they’d downsized HR ‘dramatically’ to the point where it was ONLY 120 staff. And HR and IT have national academies, and they’re even collaborating to develop ‘digital leadership’.

        Everyone has a lens through which they see the world often through their own experiences. They’ve scuttled every effective battleship we’ve owned, and the lifeboats carried surviving crew members to individual islands of success in a sea of mediocrity. Everyone else has been drowning under the ‘waves of change’ ever since.

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