What Is Next for Digital Procurement?
Digital procurement promises that it will rescue us from the tedious bureaucracy, the pre-occupation with cost over risk-adjusted value, distortions stemming from the pro forma attempts at gaming the compliance regime, and the adversarial relationship between buyers and suppliers.
Is Problem-Solution Fit More Important than Cost in Procurement?
Companies buy goods and services to solve problems.
Should Supplier Networks Be One-to-Many or Many-to-Many?
Buyers get the most out of suppliers when they make it easy for suppliers to give them what they want. Suppliers want the ability to sell with a fast cycle and low transactions costs to as many potential customers who are a good fit and with whom they can develop deep, long-lasting, collaborative relationships.
How Do Buyers and Suppliers Game the RFP Process?
Consider an analogy for buying with an RFP.
Procurement Needs to Have Skin in the Game
Buyers who treated their suppliers as vassals who would (and presumably should) do anything for “the business” suffered disproportionately during the Covid supply chain shock of 2020.
How Do Buyers Know They Obtained Value for Money?
We purchase goods and services to solve problems. The right solution is the one that solves the problem most completely. With complicated problems or ones that have complex implications for other systems, this can be very difficult to ascertain. Often a good or service may appear to be the right solution, only for this calculus to turn out to be incorrect because of a failure to acknowledge the full extent (or even the existence of) complex interactions with other aspects of the firm.
What Is Value-for-Money in Procurement?
People in procurement often talk about “value-for-money.” But what does that mean?
How Should Boards Think About Procurement?
In a pre-Pandemic world, if I were to have asked a procurement officer or a chief financial officer, “what do you hope to accomplish with procurement?” the answer would have been straightforward: cost savings. In a post-Pandemic world with an elevated and persistent interest in social justice, the response is likely to be fundamentally different.
How Should Buyers Engage with Small Suppliers?
To win contracts with large government buyers and private sector purchasers, big suppliers need to demonstrate how they engage with smaller suppliers as subcontractors. Initially, this ability will be a competitive advantage, but over time it will devolve into necessary table stakes. BDC defines small and medium-sized enterprises (“SMEs”) as those with fewer than one […]
When Will Companies See Procurement as Strategic?
“Organizations should build financial models that size the impact of various shock scenarios and decide how much ‘insurance’ to buy through the mitigation of specific gaps, such as by establishing dual supply sources or relocating production. The analytical underpinnings of this risk analysis are well understood in other domains, such as the financial sector – now is the time to apply them to supply chains.” [emphasis added]