Friday, 20 November 2015

A procurement puzzle for the weekend - What is procurement best practice?

Our newspapers provide plenty of puzzles to pass the time and 'brain train' - my preference is for KenKen, Sudoku and finally, although I lack a great deal of success in completion, Crosswords. I am quite frequently asked 'What is procurement best practice?' More often than not I am asked by someone who is very well placed to know procurement best practice and is actually doing some benchmarking research to help shape their own organisation's procurement strategy.

Perhaps you disagree with me, but I think each organisation should concern itself with what is appropriate for them as opposed to copying what may well be right for others, but sometimes is actually no more than an aspiration.  Anyway, it is useful to have an idea of what a scorecard could look like, consider what is appropriate for you, decide where you are now, and then set out a strategy of how your going to make the prioritised journey to 'best for you'.

So, with all that in mind, here's a puzzle for you for the weekend.  Below is a view of procurement best practice: What's missing and what's wrong?

No need for answers on a postcard - a comment will suffice!

  • Centre Led Action Network with Internal Consultancy service
  • C-level procurement leadership
  • Clarity of Vision for Procurement
  • Contribution beyond CQID to Strategic Goals
  • Aligned procurement strategy
  • Top table performance management
  • Top Table procurement risk management
  • Legal Compliance including, Bribery Act & Modern Slavery Act
  • Strategic Make/Buy leadership
  • Participation in NPD with Supply Innovation harvesting
  • CPO inclusion in non-procurement strategic project teams
  • Programme and Project Management skills deployed
  • 100% influence over spend (from ‘Defining Need’ to ‘lessons learnt’)
  • Intelligent benchmarking (CQID x-sectors)
  • Supply Base Policy & Strategy, including Supplier Engagement, Supplier rationalisation and making markets)
  • Integrated S2P system
  • Digital Procurement Strategy & implementation (Cloud, Social, Big Data & Mobile)
  • Category Management embedded and moving to Market Informed Sourcing
  • Global/Regional/Local right sourcing
  • Appropriate use of power
  • ‘Right mix’ procurement outsourcing e.g ‘Tail spend’
  • Competitor partnerships in supplier development
  • Ethical & Responsible SCM
  • Global TNA and Skills development plans
  • Standardised & optimised processes with robust adherence systems.


  1. This comment probably isn't going to name the missing 'best practice' but, in my experience, the missing ingredient in most organisations I come across is 'intention'. Intention to genuinely transform company-wide procurement practice. Leaders just don't aim high enough.

    Instead, they equate P2P systems with transformation, regular supplier meetings with SRM, exhortations of partnering with real supplier innovation processes, etc. It's like they pick up a menu of good procurement ideas, and then select the ones that 'might work', delivering no coherent strategy or plan. Then they wonder why their not-quite-joined-up activities fail to deliver any sort of transformation.

    Mixing it up a bit here, but as a summary.... no coherent strategy, lack of deep thinking about what will work in their specific circumstances, and insufficient intention to make it happen.

    1. Thanks for the comment and contributing to the discussion. I agree with you. I think we are talking about Leadership ownership and commitment, honesty of current position, smart selection of what would be appropriate and realistic 'better positions', then commitment and capability to make the change. Wanting to become "the best practice" could actually lead to inappropriate practice chasing while aiming for "what's best for us" would be clever strategy.

  2. Very comprehensive list and impressively put together. One thing I've noted as being absent is around the challenge of recruitment. In the same vein as the point around 'right mix' of procurement outsourcing, there's also the case of 'right mix' of in-house skills and establishing the optimal size/blend of the team. I've heard the metric of having an ROI that is 6x the cost of the procurement team, be interesting to hear how others consider the optimal team structure and recruitment approach.

    1. Thanks Nick, yes, I tried to identify the challenge of recruitment through "Global TNA (Training Needs Analysis) and Skills Development Plans - my preference would be that a 'best practice team' has succession plans too.
      The discussion about structure and ROI really depends on what the team's remit is - I tend toward a CLAN model but I can understand why, depending on the particularly organisation's needs a centralised or decentralised approach, at a particular period of development. may be more appropriate - that being the case, generalising on the '6X metric' would be misleading, indeed perhaps it falls significantly short!