Who is really good at procurement? Toyota? RBS? BA?

Another 'procurement is making huge savings' piece in Supply Management, this time from ITV.

And again, as in my last rant about this trend, no criticism of ITV or Angela Porter and her team intended, I'm sure they're doing a wonderful job.  But unless she shares the savings measurement methodology, and the detailed results with us, it is just another unsubstantiated claim.

And this got me thinking about this whole problem which is I think a big issue for the profession,  and our credibility with the C-suite.  We really struggle to identify great performance, both at individual level (which we discussed here) and at functional level.   I know the big consulting firms have their matrices and benchmarking clubs,  (funny how you never hear anyone saying, "yes, we're lower quartile in the XYZ assessment), but how accurate and meaningful are they?

If you'd asked me a couple of years ago, "who is leading edge in procurement", I might have said,

" Toyota are pretty damn good in their sector; Royal Bank of Scotland perhaps lead in Financial Services, and BA have been serious players for a long time".

Well, Toyota we all know about; RBS procurement, excellent or not, was not enough to stop the company losing 95% of its shareholder value; and BA have both business problems and have lost many of their top purchasing folk.  So I was clearly wrong, despite being pretty well connected to the whole procurement network.

So how do we establish who is REALLY good?  I'm biased, as I was involved, but I think the first round of UK government 'Procurement Capability Reviews' of departments run by OGC was pretty robust; but that required external reviewers to spend a month interviewing, reviewing material and so on.  Not an easy or low cost model to replicate. Hence, at the moment, I don't believe most CFOs or MDs have much of a clue about whether their procurement function is top of the heap, running with the crowd, or crawling along the sea bed.

What we need is some amazing process, set of questions, or magic bit of software that would quickly tell us; "this bunch think they're good but actually, their key suppliers rip them off something rotten" or "here's a firm that doesn't realise quite how good they are at category and suppler management".

A fortune awaits the inventor...

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