Monday, 21 January 2013

Sacrifice the 5 Rights at our peril

In the mid 70s, when I first entered the world of Purchasing & Stores, Purchasing was the poor relation. The emphasis was on Stores. Gold stars and kudos came from stores management, minimising stockholding but avoiding stock-outs. Having said that, the mantra was the '5 Rights': The Right Product, at Right Quality, in the Right Place, at the Right Time, at the Right Price.

When carrying out the field research for my PhD, it became clear that one of the characteristics of those who had been successful in the transition from a clerical to strategic function had been their ability to demonstrate consistent competence in delivering the 5 Rights - it was the springboard for a more strategic role. 

So, it came as a surprise to me, during the 'noughties', when I started to meet those who had entered the profession at comparatively senior levels, who asked me what I meant by the 5 Rights. I continue to meet CPOs who have no idea what the 5 Rights are - what is perhaps more concerning is that they don't seem to care. It appears to me that strategic procurement seems to have lost sight of the 5 Rights - have the 5 Rights gone the way of the Dodo? If that's the case who is making sure that the 5 Rights are achieved?

In the 70s and the 90s when I previously worked through 'crises' the 5 Rights were important - you had to make sure there was oil to heat the place and, what's more, you had to make sure it was at the right price, if you didn't you could expect to be 'at the top table', not with a seat but 'on the carpet'! 

Lately, I have observed and commented in the blog how Procurement seems to have compromised their Principal and its customers by not delivering the 5 Rights. Even this weekend there were suggestions that the whole of the new Dreamliner fleet may have been grounded as a result of failure to deliver the 5 Rights. Then we've had the on-going debate on horse meat in burgers which successfully managed to position the profession as a joke this weekend on '8 out of 10 Cats'. I have discussed how Procurement has become a Top Table agenda and News Story for the wrong reasons. The 5 Rights are the foundation on which the strategic function stands or falls. 

I'm sure many of you are familiar with the parable of the wise man who built his house on the rock - it was then able to withstand the storms. The foolish man, however, built his house on the sand, and when the storms came the house was washed away. There is absolutely no doubt western economies are in the eye of the storm; Procurement is centre stage in weathering the storm. I feel there is a risk that the rhetoric of 'strategic procurement' may see itself swept away if we lose sight of making sure the 5 Rights are delivered. 

I hope this week we are freed from the embarrassment of another high-profile procurement failure - what's the probability?

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