5 ways for busy buyers to buy quicker -
September 2022, By Jonathan Dutton FCIPS, CEO at PASA
Post-Covid, procurement teams have never been busier, Jonathan Dutton offers SUPPLY CLUSTERS members 5 reasons why, with 5 authentic short-cuts to faster work that sustain professional integrity ….
Busy Buyers
Buyers have never been busier.
A recent 2022 global survey from The Hackett Group, a global procurement research & advisory firm centred in the US, measured an average 11% increase in workload from 2021 until 2022. Although 90% of the CPO audience at The PASA CPO Exchange retreat in August 2022 insisted by vote that they have incurred a higher increase in workload than 11% Buy why?
There are FIVE chief reasons that we can see why workload has spiked so aggressively since Covid:
1. LESS STAFF:
During Covid many procurement teams dumped consultants and contractors and as yet many have not returned since. Worse, teams lost people throughout the pandemic and replacing staff with experienced buyers during an acute skills shortage has proved as difficult for procurement as it has for others.
A recent show-of-hands at a CPO roundtable confirmed 100% carrying unfilled staff vacancies. Some might also suggest less staff coming in to the office and accessing in-house systems has affected team productivity (some might argue the opposite).
2. SUPPLY ASSURANCE:
The supply chain blockages around the world are forcing buyers in Australia to be more proactive and institute real strategies to ensure supply – higher stock levels, onshoring, near-shoring or re-sourcing are all handy strategies; but all take more work.
3. COVID CONTRACTS:
During the pandemic existing contracts were often not top priority. Some were paused, others extended, a number stopped dead and cancelled, some re-negotiated temporarily, yet others ignored. This work has come around again, and needs addressing – often all at once.
4. STRATEGIC RE- ALIGNMENT:
The widespread failure of business continuity plans as the pandemic took hold has forced organisations at the tip of the global supply chain to reassess their strategic priorities. Saving few shekels off the price by sourcing from low=cost countries -v- near supply sources with greater certitude and, in a number of cases, a very viable PLAN B – which often creates the same workload as a usual PLAN A sourcing exercise. Two jobs then, not one.
5. THE ESG FACTOR:
As one CPO complained recently at the PASA CPO Roundtable, “we are just utterly overwhelmed with ESG demands currently.” Squeezing an ever broader list of ESG requirements into even simple purchase decisions takes much more effort. Ensuring compliance with mandatory laws – The Modern Slavery and Payment Time Reporting Act – are just the start. Indigenous spend quotes, buy-local policies, SME quotas, net zero targeting, renewable energy requirements, supplier diversity and social & ethical procurement efforts all take time. And as a pre-requisite for many procurements nowadays slow everything up.
Complexity
Alas, the sheer volume of work is only one facet of the procurement workload equation. Complexity of work and its difficulty has also increased. Obviously, post-Covid protocols and supplier safety factors and now integral to all supply-side arrangements. So are supply chain considerations (as above).
Yet the world is also an immeasurably more complex and volatile place since the pandemic. Global uncertainty and the insidious effects of the war in the Ukraine and its ripples have driven this.
The idea that anything done professionally or well need a complex mechanical solution feels far more right today than wrong. To slightly misquote the American writer and critic Gore Vidal:
“In life, there is always an obvious and simple answer to every problem, that is almost always wrong.”
Gore Vidal
In procurement, we can be a bit more specific – I use the equation below to illustrate the point:
Source : JD Consultancy
Sure, a professional buyer will always do a competent purchasing job by applying professional knowledge, standards and process. Yet to excel, as most stakeholders now demand, you have to cognoscente of market and even product knowledge. All this takes time. It also often rules out any useful short-cuts.
So, what can a busy buyer do to save time? Consider FIVE options perhaps –
How to buy any CATEGORY quickly today ….
1. The DIY option
You simply prioritise your new category above others (never easy) and deploy the first part of the equation above - and trust your in-house standards and a professional approach to buying any category in any market, It should, mostly, serve you well. Up to a point.
2. Aggregate
For the most prevalent INDRIECT categories, you can use an aggregator. They have off-the-shelf categories for members to buy through that present acceptable industry terms, specific protections against risk, and attractive discounts farmed from other members aggregated volume. Naturally SUPPLY CLUSTERS offer around 40 of the most popular indirect contracts – and non-members are often free to browse.
3. Supplement the team
Most are constrained in hiring FTEs – a difficult process sat the best of times within large organisations. But bringing in a temporary contractor or consultant, even a WFH freelancer post-retrenchment, to do the job for you is often an easier answer – even for a period of a few months.
A normal recruitment process should test bona-fides and experience and a day-rate or even fixed price deal is possible and an affordable low-risk option – although the skills market is tighter than you might want currently for speedy solutions?
4. Retain a consultancy firm
Turnkey solutions in various formats are available from consultancy firms large and small.
The big four firms offer trusted brands but can be pricey. Yet the ‘little three’ boutique procurement advisory firms in Australia are very credible alternatives. A plethora of smaller firms, each with a handful or so of staff, are growing fast. The one-man-bands are still around too – often with handy networks of associates to pluck from as needs dictate.
5. One category consultancy’s
The fastest growing consultancy sector is perhaps the on-category specialists. What these firms have in common is a singular specialist focus on just ONE category and that they usually have no dedicated procurement practitioners in their firm. In fact, they are often mostly all ‘poachers-turned-gamekeepers’ – that is, former sales or customer facing staff from the other side, the supply side; in fact, from the leading suppliers in their industry.
They know every trick in the book, but, invaluably, how the industry really works, key benchmarks, specific compliance factors, and where the right balance of cost -v- risk -v-v service really lies. They specialise in all the major INDIRECT categories nowadays – eg: marketing services, ITC, energy, travel, legal services, print and so on …. they are great option to set up your new category strategy or first-time contract correctly, then sustain these contracts yourself in future.
Conclusion
The 5 real reasons why workloads are currently so high in procurement also offer 5 good ways to manage the workload and take a step forward in sophistication and relevance of your procurement effort. Why not invest some time and effort in your business case to take the plunge and segment your workload amongst qualified others?
Jonathan Dutton FCIPS, is the CEO of PASA and an experienced procurement practitioner, manager, consultant and trainer, including for agile procurement through PASA AGILE, and is also a non-executive at SUPPLY CLUSTERS.
