Читать книгу Profit from Procurement - Jose Oliveira Valentede - Страница 13

There is often a perception, particularly among $1 billion plus revenue companies, that their Procurement is “already best in class,” Strategic Sourcing has been done, and “we have it all under control.” There is a tendency for Procurement to say, “We've done a lot already, there's not much left here, we're close to best practice.” Personally, I've probably had more than 100 Procurement leaders tell me this directly, and it's a problem, because they get away with it! The C-Suite views Procurement as a technical discipline and has “full trust that our CPO is taking care of it.” In reality, that's just what the CPO communicates upwards, and it's taken as gospel because he/she is a Procurement professional, and presumably they know what they're doing.

My personal belief is that this phenomenon—call it defensiveness or what you may—blocks many billions of dollars of value being delivered through Procurement globally. I call it “bad best practice,” and it's surprisingly common. It's when Procurement functions falsely believe that they've “already adopted best practice.” The most common area where this plays out is in Strategic Sourcing. I have personally met scores of Procurement leaders who have been given the “Seven-Step Sourcing Methodology” by one of the big consulting firms. These approaches make a lot of sense (and they're all pretty much identical, by the way), but they have to be applied properly. Handing out cookbooks does not make good cooks.

There are other, often very large organizations, including by the 1990s some of the larger auto OEMs, in which the sourcing process has become just a process—very institutionalized, but reduced to a box-ticking exercise. I've seen examples of the work of sourcing teams in organizations that religiously but mindlessly apply a rigorous sourcing process. They have a baseline, they have a supply market study, they've created a stakeholder map, and they have a sourcing strategy. But the baseline is incomplete and it's unclear what the total spend is, the supply market study is interesting but in no way informs the sourcing strategy, the stakeholder map has sat in a file for three months never to be re-looked at, and the sourcing strategy is to bundle the volume and beat up the suppliers.

Bad best practice is a terrible thing, because it blocks real best practice from being put in place. And it's a remarkably common phenomenon. Many times, companies truly believe they have done all the right things. In other instances, CPOs dress up their achievements as a defense mechanism against external consultants or other perceived threats. In all cases it acts as a value blockage.

So, where do we go from here? We've stated that there may be a large opportunity, we've explained how this opportunity has come about, and we've shown that there is a commonly accepted definition of Procurement best practice, but few have managed to attain this gold standard.

The rest of this book looks forward to answering the questions, “How do we get from here to there?,” “How do we maximize the profit potential of Procurement?,” and “What are the fundamental building blocks we need to have in place in order to succeed?”