The Point by Buyers Meeting Point
Where does procurement fall on the art/science continuum?
In a July 14th article on NewsDay, NYASHA CHIZU asked ‘Is Procurement an Art or a Science?’
In the article, he makes the following statement:
“There is definitely an art to good procurement but on the other hand, taking a scientific approach to options analysis, requirements development and the procurement evaluation process can facilitate a more successful procurement project.”
I found the article quite thought provoking. Rather than looking at art and science as discrete, competing approaches to procurement, I would argue that both are required for sustained success. Although we use different terminology, I believe we engage in this discussion on a regular basis in the context of quantitative (science) and qualitative (art) efforts, metrics, and opportunities. The constant tension between the two dynamics challenges us to alter our approaches and expand our capabilities to maximize the influence of both.
In many ways, the scientific portions of our function are enabled by technology. Analytics, bidding and bid comparison, and supplier data management (for example) are addressed by the solutions we leverage. To the extent that procurement’s performance is measured by savings, we are driven to be scientific professionals. We look for tangible, measurable evidence of supplier performance and seek to uncover efficiency opportunities based on demand, specifications, or alternate solutions.
But simply addressing the scientific side of procurement overlooks our significant qualitative potential. Strategy development, innovation, collaboration, and risk assessment are critical to the competitive advantage held by the company. Because they require subjectivity, these activities are unlikely to be completed in the same way by our competition. They allow us to differentiate ourselves by ensuring that the company has a unique quality offering that can be priced and delivered in the most competitive way possible.
When we consider the influence each of these dynamics has on the trajectory of procurement, science is required in order to meet expanding requirements, but art is the spark needed to exceed them.
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I would state that the science part is becoming much more sophisticated and in real time. Purchasing professionals need to make sure they keep up with the latest advances in technology.
I believe the art segment remains the most important with relationship building and collaboration yielding the real game changing results. Given the choice of hiring a purchasing professional with great people skills or great technical skills, I lean towards the people skills. Technology can be learned and taught. Great technicians or scientists make the complex, simple. Developing the "art skills" is much more challenging and not so simple.
Thank you Dr. Tom - it is always good to get your perspective.
Your breakdown of the art/science aspects of procurement makes very clear the man v. machine balance we have to maintain. Perhaps the future procurement professional will look more like Iron man than Superman!
I would argue strongly that yess, currently the old "relationship" dinosaurs are ruling the planet. However, information technology, analytics software, BI, risk management and "dashboard" metrics I will argue is changing all that. In my soon +10 years experience both in the government space and in the private sector, moreso in the private sector are let´s call it what it is "special business relationships" a requirement for doing business effectively. Once the "machines" take over and managers face tougher scrutiny and more oversight I believe the procurement, let´s call it the "consulting" industry in general is moving towards more strict regulatory frameworks, export & import tax rules, Incoterms, sourcing and tougher sanctions for breaking the new rules. As a result I think the "relationship" dinosaur is a dying breede and will fast fade away as a new generation of highly educated, skilled and . Offcourse will relationships contiune to form and still play an important part, however if you DO have the technical skills and the analytical capabilities to move a company forward using methodogies & techniques, you WILL become more valuable than the old school professionals that simply ended up in procurement from other jobs and associates. I am a firm believer that this will permanently change the competitive landscape as you open up the floodgates to tap into your installed supplier and customer data base, and no company who has achieved that has ever failed, just to name a few, Microsoft, IBM, Apple etc. To refine this scientific approach a little bit more companies can simply setup a ABC-analysis to easily find out expenditure, volume, spend, margin to break down the "so-called" A and B-list vendors and create a supplier strategy/business plan from this analysis. Kraljic matrix for product and service management can then be used on top of this layer to position the strong and weak links in the chain. Companies that do this on a regular basis (once a year or every second to five year) will survive, companies that don´t will eventually fade away as the competition gets more fierce and new threats emerge. One can even use Porter´s 5 forces to determine risk management and create proactive strategies. Let the "relationship dinosaurs" transition into a permanent sales role and let the new wave of fresh talent form new innovations, learn how the regulatory frameworks work and increase our status as procurement proffesionals, not just simply relationship managers.