Procurement As A Force For Change (Part 1)

Towards the end of last year we wrote about a couple of the guest sessions at the recent Bloom Procurement Services customer event, but we didn’t cover my own session, which was titled “Procurement As A Force For Change” – which was indeed the theme for the whole event.

I took that to be a force for positive change – there is another whole debate about whether procurement can be a force for negative change! The answer is probably “yes” although hopefully that doesn’t happen too often. So, in terms of positive change, how can procurement contribute?

To put the question into context, I looked at my own history in procurement roles, and how the high-level goals varied by organisation. At Mars Confectionery, where I first got into procurement, the key and central goal of a raw materials buyer was to ensure reliable supply to a factory that ran 24/7. There were other goals, and Mars thought more intelligently about competitive advantage from the supply chain than most, but to survive and thrive, a buyer had to make sure that products of the right quality turned up at the right time and place to make sure the factory kept running smoothly.

Then at Dun & Bradstreet, in a new corporate role, I had to find cost savings, at least enough to justify my existence! That was largely through applying leverage and aggregation across Europe.  But we also started working on some quite innovative strategic partnerships with firms such as Xerox, and procurement was beginning to get involved in complex services too such as in IT, or temporary labour.

Then, as Procurement Director for the Department of Social Security (DSS), the agenda was quite different. Yes, cost was important, but on major projects it was very much whole-life cost, and the major outsourcing and PFI projects we were engaged with went much further than that. Helping to achieve the organisation’s strategic goals and driving the right policy outcomes was key for procurement, as was the balance between cost, quality and service. But, to be honest, the wider “social agenda” had not really hit public procurement at that point. I don’t remember too much talk about SMEs, sustainable procurement, equalities …

Finally, at NatWest, strategic value and indeed how procurement could support the revenue side of the business started to come to the fore. Procurement was very much involved in complex services, although consulting was still a tough category. I was also there when the financial services sector first started getting regulated in a supply chain context – we had to report on key outsourcing contracts for the first time.

So, we could look at this as some sort of evolution through the role of procurement. Here is how I described that “procurement journey” at the Bloom event.

It is rarely linear for individuals or organisations of course, but we can see how over the years procurement professionals have been expected to contribute on a wider front within their organisations, which is generally positive for the profession.

However, there are questions too –for instance, are we expecting too much of procurement, particularly in the public sector? That focus on social value and other wider areas , well beyond “just” VFM, can lead to pressures and tensions.

Whatever the answer to that question, the expectation is there without a doubt. So, if we apply that model to the world of management consulting, how does that relate to the contribution that a category manager in that sector can make, in both public and private sector? In part 2 of this article we’ll take a look at that.

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