Progressive Procurement – Why Your Procurement Policy Needs More Than Just a Savings Target.

In a recent article published in Localgov.co.uk, the Manchester City Council in the United Kingdom is featured for it’s 10 years of progressive procurement practices.

As I read the article I was impressed with the increase in spend under management from just over 50% in 2008 to more than 75% in 2016.

For procurement professionals capturing spend under management is often the hardest part of the job.  Often department managers and supervisors resist the help of procurement and insist on managing procurement on their own.

So despite the few details in the actual article, I was intrigued by their story and dug a little deeper.

I was pleased to find quite a bit more information in a publication called “The Power of Procurement II” (the Power of Procurement I was published in 2010)

Regardless, I was excited to learn more about what the Manchester City Council’s calls Progressive Procurement and of course I will share how this impacts you.

For the Manchester City Council, Progressive Procurement has meant a procurement strategy that addresses a broad range of social and economic considerations.  These consideration function as the foundation for their success and can be summarized as follows:

  1. Centralized Procurement
  2. Sustainable procurement policies
  3. Small business contracting programs
  4. Local Supplier programs

Building on top of that foundation, In the last 7 years, Manchester City Council implemented the following:

  1. Procurement Process enhancements
  2. Supplier Engagement programs
  3. Moved towards data driven analytics

The results of Manchester City Council’s efforts have been quite good.

Local government spend within Greater Manchester is at 90.7% which also means that for every dollar spent by the Manchester City Council, the community reinvests 43% of every dollar back into their community.

Spend with small business enterprises within Manchester is at 53.3%.  That is more than 20% over the UK’s 2020 target.

So how does Manchester City Council’s procurement success affect you?

Whether you are a small business Owner, a Home Owner, or a Captain of Industry, consider how a procurement policy that is about more than just cost savings benefits you and your organization.

Any time your focus is ONLY on cost, you are missing the big picture.  The level of service, the quality of goods, the social impact you make are all critical success factors for every engagement.

I would encourage everyone who has a role in procurement to carefully consider and align the policies of your organization with your procurement policies.  Ensuring that your procurement policy aligns with more than just the bottom line will not only enhance the value of procurement, it elevates the value of the organization.

I’m proud of the Manchester City Council for it’s progressive approach and I wish them continued success and I hope you have been as inspired by their success as I have been.

What do you think?  Is your procurement policy aligned with your values?  Do you agree that broader policies improve the overall organization?

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