In a recent article published by cyberscoop.com Senator Mark Warren a Democrat from Virginia suggested that procurement takes too long.
The article refers to procurement in the context of IT or cyber security, so it’s not directly relevant to construction procurement, but having heard the same or similar complaints in construction, I wanted to use Senator Warren’s comment to address this issue.
First let me state that procurement is more than the act of buying goods and services. Buying goods and services is just one aspect of procurement. This is called purchasing.
Every organization should have a process for expedited purchase requests. Problems arise when purchasing processes and/or procurement strategies are not in place. A lack of process and strategy leads to persistent request for expedited procurement.
Here’s a link to an article I recently published on this subject.
Procurement should be considered a strategic function aimed at solving a future service or product need. Business needs should be considered well in advance, not at the time for purchase.
Whether you are in the private sector or in the public sector, when you engage procurement in your strategic discussions the potential for innovation grows exponentially.
Let’s consider for a moment a company with a need for re-branding of their retail operations.
The time to engage procurement isn’t after all decision have been made. Procurement should be engaged while the thought process is underway. In such a scenario, procurement professionals can provide the business with critical feedback on which vendors are currently under master agreement and which firms can be engaged immediately to begin concept development.
Keeping procurement engaged through concept development, it may be possible to leverage existing master agreements to facilitate and simplify the deployment of new prototypes.
Working with designers, procurement can inform the the team of existing agreements for common elements such as flooring, wall covering, lighting, or other products. Such information can help establish a palette of pre-negotiated materials well ahead of the need for placing orders. This kind of procurement engagement can improve deployment schedules, reduced construction times, and drive down costs.
I know that I have broadened the context of this article to the extremes of construction but I wanted to discuss how procurement can be a strategic partner and not just a schedule hindrance as suggested by Mr. Warner.
I understand that in IT technology changes quickly but the use of master services agreements and variable pricing models are prevalent in both IT and construction procurement.
I want to emphasize that procurement can not be strategic unless they are present during strategic decisions.
All too often organizations develop strategies and then thrust their demands onto procurement expecting immediate or quick turn-around. This is not the way to use procurement.
Purchases can happen quickly against master agreements that have been put in place strategically to meet the demands of the business, but business leaders need to consider procurement as an integral part of the strategic vision.
So what do you think? Can procurement be a strategic partner in your business? or do you see procurement having a different role? Tell me your thoughts.