URGENT PROCUREMENTS – THE NIGHTMARE OF PROCUREMENT FOLKS

In my years of working experience, I have come to appreciate the importance of planning and forecasting. Even though planning may not necessarily be the ultimate ceiling of how exactly the future of the business or procurement would turn out to be, but it is a sure way to avoid most of the risks that comes with cost implication, failure to comply with legal requirements and organizational policies and procedures.

As an early entry into employment, I got exposed to rigorous demand for effective planning and risk management which gave me a firm commitment to appreciate the power of planning in every aspect of business however, in my life’s career journey, I have also been exposed to another thorny issue of seemingly “Always emergency procurements”. It is against this background that I wish to deal with this aspect of business.

The best most successful and celebrated procurement departments I have ever come across are those that value the principles of planning. Not only does planning gives you the ability to search the market for the most cost-effective products and services but its also affects your procurements in many other ways among them being:

1. Scope Creep: This is a concept used in project management, however, equally applies to procurement activities. When there is lack of effective procurement planning, stakeholders more especially the end-users tend to add more deliverable or keeps on adjusting their needs either upwards or downwards as a result it tends to pushback on deliverable for respective procurements. Such back and forth issues impact on the procurement timelines negatively by causing delays and consequently bring the procurement team’s Morales down, in most cases causes a lot of stress for the procurement teams.
2. Budget Overrun & Variations: when a procurement process or activity’s scope creep happens, 90 (ninety) percent of the procurement undertaking experience budget overruns and procurement variations. These are not good factors for any business that seeks to remain profitable and competitive. When procurements are properly planned, procurement department is then strategically positioned to help an organization increase on its return on investment, increasing on procurement quality deliverables, and ultimately increasing on the overall operational efficiencies and effectiveness of the organization coupled with increased profitability. I must emphasize that, as a result lack of planning, I have seen organizations committing to contractual terms that end up costing them money where cancellation of either the orders or contract is done, because someone did not fulfil their part of the bargain.
3. Lack of Support & Demotivated staff: Like earlier indicted, procurement stakeholders such as the end-user are better supported by the procurement teams when there is effective planning consequently improving motivation among the procurement teams as they will be less stressed and will be in control of their time management however, where there is lack of proper planning, procurement departments and personnel's do not offer maximum support to their stakeholders such as the end-user because they have to bit tight deadlines which in most cases comes with emotional swings and fear to fail to deliver resulting in a lot of errors being made.
4. Bad Reputation: At the core of every procurement if the need to manage both internal and external relationships effectively and mutually beneficial and reputation becomes critical however, this is not so when it comes to lack of planning. Imagine you being an organization known for last minute activities? Imagine you are an organization only known for emergencies even in a time where there could have been enough time to plan and execute the procurement activities in a way that adds return value for money? This is a reputation to be avoided. Unplanned procurement can be very costly both on reputation and from the financial side.
5. Bad time Management: One of the thieves of time is lack of proper planning. Show me a procurement department that is effective and efficient in managing its timelines and I will show you a procurement department that respects planning. Failure to plan is failure to effectively management both personal time and procurement timelines. Unplanned procurements tend to take of time off most of the procurement teams and equally, fails to meet the desire quality of the product and services being sought after.
6. Risk management: There are many risks that come with poor or lack of procurement planning among them being; the risk for failure to comply with set out law’s and regulation, failure to comply with internal policies and procedures, risk of procuring low quality products and services, risks of financial loss due to lack of conducting due diligence, failure to stick to the budgeted costs and amounts among others.

In conclusion, I must emphasize most of the procurements we deem and tolerate to be emergency procurements could have been avoided and the loses that we as procurement experts subject the organizations, we work for could equally be and have been avoided if we could plan well. We are not saying emergencies may not arise but where emergencies become a culture of every procurement, its leave much to be desired for us as procurement practitioners.

See you at the top.

Richard Mumbi

Project and Procurement Expert.

Other Publications:

• BENEFITS OF TEAMWORK - A PROCUREMENT PESPECTIVE
• Prioritization Matrix – key to effective procurement
• UNDERSTANDING CONFLICT DYNAMIC IN PROJECT AND PROCUREMENT MANAGEMENT – A SURE WAY TO ACHIEVING ORGANISATIONAL SUCCESS
• UNDERSTANDING CONFLICT DYNAMIC IN PROJECT AND PROCUREMENT MANAGEMENT – A SURE WAY TO ACHIEVING ORGANISATIONAL SUCCESS
• Never follow the crowd; instead, stand out and be a pioneer.
• Navigating through workplace relationships
• The rise of Artificial Intelligence (AI) in Procurement and Supply Chain Management: Opportunities
• VALUE ADDITION IN THE SUPPLY CHAIN