Webinar Notes: Doing More with Less in Procurement

This week’s featured webinar was hosted by ISM, sponsored by Hubwoo and presented by Spend Matters. ‘Doing More with Less in Procurement: a punch list of 25 items to improve your productivity’ was based on a snap poll taken to help participants benchmark themselves relative to their peers in this area. As you might expect, prioritization is key, and we will hear more in the ongoing discussion of tactical versus strategic efforts and how to keep the machine cranking efficiently.

ISM usually makes their events available on demand at no charge so watch their webinars page for this event to be listed.

218 respondents took the poll via a web survey in April. 35% were in manufacturing, notable because the next largest industry represented only 7% and the fragmentation increased from there. The respondents were given points in each productivity category for how implemented each technique was. In addition, respondents were divided into two groups: highly productive and less productive.

Of all the rankings and comparisons between the two groups, the one of most interest to me is based on the gap between the highly productive organizations and every one else. The productivity practices with the largest gaps were:

1. #18: Market segmentation to pick categories where longer-term evergreen contracts (with renewal notifications!) combined with intelligence monitoring (e.g., via 3rd parties) for exception notifications
2. #8: Use of supplier networks to improve supplier discovery, qualification, and on- boarding/integration
3. #23: Implement procurement as a managed PROCESS (e.g., supplier management) independent of whether the formal procurement organization resources execute the processes
4. #19: Having current/prospective suppliers develop multi-year cost reduction strategies to allow continual cost savings and to free you up
5. #17: Use of eSourcing systems and contract management systems that automate workflow AND create/re-use standard templates to prevent "re-inventing the wheel”

Of the top 5, two are solution-based (#8, #5), and one is highly supplier dependent (#19). The other two probably require significant changes in operation for most procurement groups. The idea that evergreen contracts can be a good thing may make some procurement heads spin, but with the caveats that you still have to actively manage the agreement as prices change and you need to be notified at renewal times and when exceptions occur.

The most radical by far is the idea that procurement (little P) can exist outside of Procurement (big P) as a combination of process and discipline. If you can’t manage all of the spend with the resources you have, ‘deputizing’ a few more people is a very real way to get more work done – I’m thinking Wyatt Earp at the O.K. Corral. Those outlaw cowboys were coming whether Earp liked it or not, and the only way to make their resistance legitimate was to make his brothers and Doc Holliday temporary marshals.

I was also partial to ‘surprise’ productivity practice #26: Use of personal productivity tools and training. Any group (procurement or otherwise) is only as productive as its individual members. Regardless of the system you use (I’m partial to scheduled/repeating iPhone to-do list reminders myself) having a system that works for you increases your productivity in multiple ways.

Not only do you remember to do everything expected of you, but you also come across as in command to the executives and stakeholders you come into contact with – increasing their confidence in you and your work. The credibility and influence that accompany this may be the greatest productivity levers of all, particularly if they make others in the organization remove roadblocks and work at your side.