Understanding the Procurement

On my mission to make sales: a force for good #saffg I am sharing a text interview with the head of procurement for a medium-sized company based in London. After reading this interview, you will have a better idea on how procurement thinks and values.

Can you tell me something about your own career and how you got to your current position?

I started in Procurement within the Hospitality Sector, working for Hotels and Michelin Star Restaurants, before moving to Distribution as a Senior Buyer, and then Manufacturing as a Category Lead. In my career I've worked across a number of different categories, which has given me broad experience across a lot of areas.?

What do you like best about working for your organization?

The company I currently work for is a Medium Sized company, that is fast-paced and dynamic. - This means that no day is ever the same, and you can work on a number of different projects at one time. Additionally, there is a lot of the best practise which can be put in place, which adds to the challenge and fun.?

In terms of your own effectiveness and how you spend your time, what would you like to do less of, and on which activities do you want to spend more time?

Most of my day now consists of various meetings, both on projects, and with Senior Leadership to sell how Procurement can add value to the business. As I've progressed in my career, I've found that I spend less time engaging with suppliers, which is something that I've always enjoyed.?

If you hadn't gone into procurement, what do you think you would have done instead? My plan was to study and go into Psychology.

What's the most memorable book you have ever read?

Either The CPO, or How to Influence in any Situation, both of which I tend to go back to regularly.

What are your most pressing issues right now in procurement?

For me, right now Procurement is at a point where it can add substantial value to the business, however historically it's been seen as a function that only focusses on cost, and is there as a support function. I'm therefore doing a lot of work at the moment to raise the profile of the function in the business, and prove that it can add value beyond just agreeing a price, or raising an order.

What makes you qualified to be in procurement?

I've been in procurement over 15 years, having started as a Buyer, and working my way up to Head of Procurement. Additionally, I hold a qualification in procurement, and have worked across a range of categories

What is the purpose of purchasing?

I guess there is a difference in description here. For me, purchasing is mainly around getting the product to the business, and selecting the best supplier etc. Procurement however is more about the bigger picture, it's about supporting and enabling the business to succeed, by ensuring that the right suppliers are being worked with, that our external supply base understands what is required of them, and is being challenged and engaged, while also looking at what is going on in the market and what could result in challenges in the future.

What are the fundamental strategic principles of procurement?

For me, the strategic principles of procurement, would be to a function that is engaged with ensuring that the right supply base is in place to ensure that there is business success. It's about thinking beyond just price, and also being focussed on what different functions require to deliver the best possible product.?

How do you develop a strategy?

When developing a strategy, I tend to first look at where I want to get to, what the bigger picture is, and what I can imagine doing in 3-5 years. I'll then work back from this to identify and understand what needs to be in place to implement that vision, and from that build out individual strategies for each category which my team manage, along with them

How do you evaluate risk?

For risk, I work closely with the relevant category teams to understand what is important to them, and then map suppliers against this, while also factoring in procurement requirements.

What is their risk management process?

I'm currently in the process of building a new risk management process, which should focus on variables which are being recorded as part of everyday business. These risk factors can then be included into regular review meetings with suppliers, so that we can identify and manage risk quickly, rather than it being a process completed once a year with no real point to it

How do you go about value analysis?

I'll use a range of different methods, but typically it's about being in communication with suppliers and also users to understand what's going on. From a cost value perspective, I'll regularly run benchmarks on the largest spend lines, while for smaller/tail products will benchmark these every year or as contracts/agreements come up.

What specific negotiation methods do you use?

I typically vary negotiation methods by the situation which I'm in. I don't think there is ever just one method that works best for every situation.

How do you evaluate the success of those negotiations?

Typically, before any negotiation I'll try to have an idea of what I'm looking to get out of it, and what the plan of attack will be. At the end, I'll then evaluate how many of the areas I was aiming for had been achieved, and generally how the meetings went. I'll also engage with other colleagues to understand how they thought things went

What training do you undertake to improve procurement process?

Has the pandemic affected this process - how and what are the implications for the future? Personally I'm currently continuing my CIPS qualifications which has been affected by Covid in the form of having exams cancelled. I'm also looking at other external courses for my Team and I, which have all transitions to online, rather than being held off-site. I think that online training will potentially become more prevaliant, even as things open up, as you can then attend from almost anywhere.

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How many times in your career have you changed from the suppliers recommended by other stakeholders working on the project?

I've often selected suppliers who are different to those recommended by the stakeholders. Typically, I'll look at a wide range of criteria when making a decision, rather than just basing a selection on a recommendation. It's important to also have a number of options for review to ensure that the best option is being selected

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How much preparation do you do for negotiations?

I try to prepare for every negotiation, and understand ahead of time what the key pieces of importance are for agreement on. I'll liaise with stakeholders ahead of every negotiation to agree tactics and how we will structure the conversation, and will try to research the company I'm dealing with to understand more about what challenges they have, and how what I'm asking for impacts them

What percentage of 'late' entrants win RFPs?

By late, I'm assuming entrants who respond after the response deadline. In my experience, this will always be zero. As I won't look at the proposal sent.