Wednesday, 12 February 2014

Procurement 20/20: Supply Entrepreneurship in a Changing World - book review

A new book on procurement is always of interest but too often takes on the 'emperor's new clothes. Unfortunately, even though this is a book written by four McKiksey consultants, little is new. 

For example, the authors take Lamming's suggestion of purchasing needing to become External Resource Management (1993) and provide examples that becoming a reality. Sadly Lamming doesn't get an acknowledgement of the rebranded concept. That would be understandable if it were not that McKinsey's father of the Kraljic model is used as a springboard for the book.

Great examples are trotted out, but yet a blindspot exists by not recognising the problems Apple and others encountered through using Foxconn. Instead Apple's outsourcing to Foxconn is viewed as exemplar! So, for example, "Apple maintains control over nearly every step along the value chain. ... The orchestration is so tight and extensive that Apple places electronic monitors into some parts boxes at supplier sights to allow remote monitoring of production speed and discourage product theft". Then think of the problems I've highlighted in this blog previously encounered by Apple and Foxconn!

I like the style of arguing throughout the book why procurement is well placed to take advantage of the business changes discussed. But those arguments are not new. In fact little in the book is remotely new, take as another example, the section on CSR - the authors view of best practice was actually being practiced in the mid 1990s!

The most disappointing section was the discussion on digital procurement. This lacked vision, was more concerned about data-mining at a fairly rudimentary level, and gave scant attention to how social collaboration could transform procurement's role. It seems hard to believe the authors illustrated so little thought leadership.

Having said that, the most useful chapter, to me, was 'Volatility as the New Normal' which had some very good advice on risk management.

Who is the book for? If you're a CPO and the stuff in the book isn't already on you radar, then I suspect, your chances of leading the required change are limited. While if you're already addressing these approaches, how does the book help you?  Perhaps it's real benefit is in bringing together previously published concepts which have not gone out of print.  

I suspect, the real audience should be CX's who don't quite understand the value procurement could bring, and want to understand what's necessary to bring about change - that can't be a bad thing.

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