Suppliers Don’t Respond to RFPs Because They Think They’re Rigged
A Request for Proposal (RFP) is a reverse auction. Unlike a regular auction in which there is a single seller and an audience of buyers bidding up the price of the item, in a reverse auction there is a single buyer facing a crowd of suppliers bidding down the price (and/or increasing the quality) […]
In Procurement, Value Isn’t Price and Price Isn’t Value
Imagine a new procurement officer named Jill who joined an established manufacturing company recently. She has been put in charge of her first project. She needs to purchase 1,000 pounds of Grade C Copper. It’s a commodity. She needs to guarantee its delivery to the company’s factory in North Dakota on a specific date: November […]
Joint Procurement Does Not Have to Be Slow
Every large sourcing event is now a team event, as we wrote about previously in “Procurement Is a Team Sport,” quoting Gartner: “The typical buying group for a complex B2B solution involves six to 10 decision makers, each armed with four or five pieces of information they’ve gathered independently and must deconflict with the group. […]
In Procurement, Margins Are More Important than Cost Savings
The conventional wisdom about procurement is that cost savings are the fundamental priority. One sees this emphasis all the time. Here is Procurement Magazine referring to the 2023 Hackett Group survey: “Procurement’s main priorities for the year include ensuring supply continuity, combatting inflationary pressures and reducing spend cost.” Who could argue with the importance of […]
Competitive Sourcing Leads to Diverse Sourcing
Deloitte found in its 2023 Chief Procurement Officer survey that the top three priorities were: driving operational efficiency, enhancing ESG/CSR, and digital transformation. ESG has become more important over time. As recently as 2021, improving ESG ranked only seventh on the list of priorities. Society is changing. The contemporary enterprise must adapt and evolve to […]
Procurement Is a Team Sport
Procurement, especially for complex purchases, involves groups of people from different functional areas within the buying enterprise. Here is Gartner: “The typical buying group for a complex B2B solution involves six to 10 decision makers, each armed with four or five pieces of information they’ve gathered independently and must deconflict with the group. At the […]
What Do People Want from Procurement Technology?
“Good marketing is the craft of understanding what people want and need and helping them achieve it.” – Seth Godin What do people want from procurement technology? They want it all. Outcomes If we start with outcomes, they want to make sure that they are buying the right solution for the problem at hand. If you’re […]
Generative Text is the Procurement Junior Staffer You Didn’t Know You Needed
Procurement is the first mile of the supply chain. Already, before the Pandemic, procurement teams were spread too thin. When Covid hit with its full force, these employees faced tremendous additional stressors, challenges that persist in many ways. It’s no wonder that there is burnout. 89% of survey respondents in this Keelvar survey say that they are “banking […]
Procurement Is Investment
I have had several careers. I started in finance trading foreign exchange options for a bank right after the British Pound fell out of the Exchange Rate Mechanism. This was a great opportunity to learn. It was the blue collar of trading. It was an extension of the money-markets. These weren’t the gods of the […]
Procurement Is the Most Important Function CFOs Neglect
Perhaps it is because they think that the Chief Operating Officer has it covered, but procurement is the most important function Chief Financial Officers neglect. Maybe they think that the Chief Supply Chain Officer (or anyone else) is on the case. Too many CFOs let procurement fall between the cracks. It doesn’t get the attention […]