Wednesday, 28 August 2013

Lean or anorexic procurement

If you cast your mind back to 1993 you may recall the seminal book by Richard Lamming on Lean Supply. It wasn't actually called Lean Supply but 'Beyond Partnership'.  That was closely followed by Peter Hines' 'Creating World Class Suppliers'. Many other discussions at the time were indicative of a paradigm shift in procurement thinking. These were more than conceptual ideas, they were based on the hard evidence of what worked. The key change was a recognition that 'adversarial' relationships were not always appropriate, that while there was plenty of talk of partnership, there was a need to go 'beyond partnership' and adopt 'lean'. You may well ask which procurements would be most appropriate for 'a lean strategy' - well, in general terms, those procurements which are strategic.

Fast forward 20 years and we hear the rhetoric of 'lean sourcing' within UK government as the panacea to all woes. Yet have they really understood what 'lean' means. Lean is more than taking costs out of the system and drawing closer so that innovation can flourish. It also requires an entirely different approach to buyer/supplier relationships and contract management.

We have the theory and gospel of 'lean' in government procurement and we can set that alongside the practice, for example, the transporting of prisoners and tagging services. Let's consider Serco, who would have been assumed were a strategic partner of the government but now appear to have fallen from favour on both those contracts - the MoJ have called in the police to investigate claims of fraud in prisoner escorting and there are parallel claims of overcharging for tagging 

This does not exemplify lean on either side of the dyadic. The notion of calling in the police to investigate fraud, claims of overcharging and even allegations of some questionable contract management are an anathema to lean.

It would be possible just to throw stones at Serco. It would also be possible to throw stones at MoJ. Both those approaches may bring short-term solace for one party but wouldn't really help public procurement as we approach the economic recovery. However, we could consider this an opportunity to adopt a more strategic approach and find out what went wrong in melting pot of the theory and rhetoric of lean, the current cost reduction focus and the day-to-day breakdown of contract confidence. Either way we need to revisit the implementation of lean within the UK public sector during a time of 'bust' as opposed to a time of plenty. 

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