PROCUREMENT STRATEGY SERIES: 4. PERFORMANCE CULTURE

In the last video (and blog) in this series I floated a few questions about the process of selecting key performance indicators (KPIs) for the procurement function. I was deliberately non-definitive on this topic because I’m returning to it later in this series.

Regardless, this time around I’m sharing some thoughts on what it means to have a procurement function that’s ‘firing on all cylinders’, one that is optimised for the organisation, and the time during which Procurement has to operate.

We all surely remember what it’s like to carry-out a procurement role in an environment characterised by fire-fighting, ill-thought-out tactics, and no coherent strategy. Those of us who started-out in this profession many years ago know that this type of environment was pretty-much the norm, with exceptions in a handful of sectors and a modest number of (already ambitious) organisations.

Given that I’m of the view that we are unlikely to be successful is developing and deploying strategies without first baselining where we’re starting from, all readers here and viewers of the video will recognise where their particular procurement set-up is on this journey from fire-fighting to having a procurement system that is fully-optimised.

It’s an interesting way at looking at performance management, as it goes further than simply devising and implementing a series of KPIs that seemingly focus on the ‘right things’. It suggests that the culture of the organisation is a precursor to deploying performance measures that (a) matter, and (b) have a chance of delivering tangible and sustainable improvement.

So, a couple of questions:

Where would you say your organisation is on this journey to optimisation?

Are you and your colleagues paying sufficient attention to creating a culture that can deliver predictably superior outcomes?

In the next video, I’ll be drawing attention to the role of leadership in overseeing and intervening in the procurement system. I won’t be suggesting that obeying the boss is the best way for people to behave.

[ramkrishnasapkota]

David, it's refreshing the thoughts on public procurement in practice! I appreciate you for the videos on public procurement!🎉

[MGKBOSTON]

Dependent on the buyer, fire fighting can be a way of life. I've worked with disorganized people and they thrive on the chaos. This despite the fundamental ways to avoid it within an MRP planning system. Accurate master data within the MRP including basic things like current market lead time on raw materials, safety stock, etc...Supplier quality engagement is also a key element. A good SQE along with the buyer should be able to navigate and maintain good buyer/supplier relationships. I am lucky in that regard these days having that important engineering support always within my reach on any given day. Scorecards were a valuable tool pre-pandemic however with the supply chain issues we've all experienced they've kind of gone out the window, but are coming back as these issues are finally improving.