Simple But Important Procurement Lessons from George Best, Astronaut/Senator John Glenn, and Lesser Mortals

Thinking about things I’ve heard or come across in my professional life over recent years that resonated with me as valuable procurement lessons I’ve put together this brief commentary on some of them.?I’ve touched on the first three previously but they’re worth a quick refresh.

Firstly though, a couple of my favourite quotations from outside the procurement world that illustrate important lessons:

Attributed to George Best, legendary, brilliant, Northern Irish footballer of the 60’s and 70’s: “I spent a lot of money on booze...and fast cars. The rest I just squandered.”

Accepting it’s from a different era and intended as humour the quote (if retrospectively poignant) can be used as an illustration of the meaning of value.?What’s important to you may not be to someone else (think customer and supplier).?It’s essential to be clear on what you’re trying to achieve and at the same time to seek to understand the supplier’s take on value.?This helps drive strategy development and tactical negotiation planning.

Mercury Astronaut and later US Senator John Glenn, the first American to orbit the earth: “As I hurtled through space, one thought kept crossing my mind – every part of this rocket was supplied by the lowest bidder.”

One assumes it was meant wryly for, as is well known, simply striving for lowest cost is never a great approach and is as akin to professional procurement as sarcasm is to humour.

Now turning to observations taken from my direct experience…

No. 1 - A Procurement Manager with limited commercial experience: “Procurement is easy”.

Given that procurement is concerned with global markets, ever-changing products and solutions, complex risk management, countless stakeholders with their own opinions and motivations, shareholder-owned suppliers, etc if you think it’s easy, you’re probably either a procurement wizard, not going deep enough, or under-performing but not realising it.?Not every procurement is deeply complex but the analogy ‘if it looks like a duck, it probably is a duck’ doesn’t always hold here.?If it seems simple, better be careful.

No. 2 - Various procurement media of recent times (1): “Procurement can be automated”.

Well, some processes can be, particularly around online auctions and certain sourcing steps, but high-achieving procurement success depends on managing human interaction, influencing, and the subtle interpretation of analysis in context.?It relies on human traits such as personality and behaviours, and on the ability to engage effectively.?Technology is moving at a faster pace than we can comfortably adapt to.?It’s very useful, but we need to find the balance.?I recommend we keep talking, keep enquiring, keep learning…and keep enjoying.

No. 3 - Various procurement media of recent times (2): “Category Management has had its day”.

Category Management isn’t an optional tool (though tools within Category Management are).?Call it Portfolio Management or any other name, Category Management is just the term we use to consider what it is we need to buy or what problem we’re trying to solve, and how we marry that up with corresponding supply markets, suppliers, and solutions.?This is the essence of procurement.?If you’re not doing some form of Category Management, no matter how it looks in your organisation, how can you build and implement a strategy that will optimise outcomes? ?You might be doing OK, but are you doing as well as you could? ?Buyers should always have at least some combination of the many Category Management tools in play.

No. 4 - A local government organisation Procurement Manual: “Specifications are an important part of the sourcing process”.

OK, I’m being picky here as I know what it’s trying to say.?I just think the emphasis is wrong and if taken that way it can lead to problems.?Forget the process, the ‘specification’, i.e. your business need however you describe it, is paramount.?The process should just help achieve targets efficiently within whatever compliance parameters you face.?Put your needs – usually a clear picture of what your internal stakeholder or external customer wants – top of mind.?

No. 5 - A government Ministry: “We can’t talk to the market unless we have a tender to manage”.

On the contrary, although we need to be careful in our language and messages, engagement with suppliers to gain knowledge and insight prior to the development of a formal RFx should be ongoing.?The pitfalls to navigate are typically to do with avoiding making an actual or perceived commitment to suppliers, avoiding any subsequent bias, and carefully managing information gained, especially any supplier intellectual property.?Most suppliers want to have a dialogue.?Done properly, early market engagement can be very beneficial.

Finally, no. 6 - Oft witnessed in less mature organisations and with non-procurement stakeholders: “Suppliers always want to take advantage of us”.

It would be foolish and na?ve to assume that suppliers fall over themselves to give every benefit they can to their customers, and managing relationships on an arm’s length basis is a valid approach in certain circumstances.?Divergence of interests is obvious – cost of ownership versus shareholder wealth, ownership of intellectual property, agility versus long term commitment, and so on – but it’s often overlooked that there are many interests that converge.?These include building a market reputation for excellence, attracting talent to the supply chain, managing risk holistically, efficiently utilising resources, collaborative working for mutual benefit, minimising compliance costs, and achieving social and sustainable outcomes, to name a few.?The key is to accept and manage the areas where perspectives diverge whilst not forgetting to promote and exploit those that converge.

Dave Nellist FCIPS

July 2023