Daily Archives: August 26, 2011

What Defines a Procurement Master?

In their recent piece on Compulsive Contributors, which reported the results of their 2011 Procurement study, Accenture defined their hallmarks of procurement mastery. Briefly, they were:

  • A formal procurement strategy integrated with the corporate strategy.
    77% of masters have this, 88% have procurement governance processes in place, and 90% provide innovative value above cost savings as a key element of such strategy
  • Effective integration with supply networks.
    66% of masters look beyond first-tier suppliers for collaboration opportunities (and 60% of masters actively monitor supplier performance)
  • Sourcing and category management excellence.
    Coupled with a push for better demand management as part of a long-term category strategy that drives continual cost improvement. Nearly 75% of masters have resources and processes in place to ensure compliance and nearly 70% of masters have structured sourcing processes.
  • More spend under management (SUM).
    And better visibility to boot (by way of a melding of process and technology). (81% of masters have an integrated end-to-end source-to-pay process and 73% have a master data strategy.) In fact, they manage 15% more indirect spend and 12% more direct spend.
  • They do more to retain and attract the best talent.
    While they need to do more, and recognized this, masters are ahead of contenders in terms of talent development programs. In addition, 67% of using balanced scorecards and KPIs.

These insights, which echo what many Procurement thought leaders have been preaching for some time now, are good as they validate what the experts know. Talent-focussed masters go beyond three-bids-and-a-buy. Taking the strategic approach, they look for value across the board — and deliver that value like no other function can.

Public Procurement in 2020 — Are You On Track? Part V

At the beginning of the week, we began our discussion of Hansen’s predictions for public procurement in 2020, which were offered as a 5-part series last month in response to the 5 predictions of Bob Lohfeld (of Lohfeld Consulting) that were published in Washington Technology in early July. We started with a discussion of the Government Market and then moved onto discussions of Workforce, Process, and Technology. Today, we tackle the final predictions on Transportation.

In his piece, Lohfeld prognosticated that:

  1. While computing will be ubiquitous, we will still be plagued with transportation problems.
  2. Traffic will become so congested around major cities that employers will always offer alternative work schedules and telework options.
  3. The Washington Beltway will regularly come to a standstill and no longer be considered a reliable transportation corridor. The Tysons Corner area will be in its eighth year of modernizing, and Maryland will be in its 40th year of studying the environmental impact of building an outer beltway. The Silver Line will finally reach Dulles Airport.

Well, duhhhh! He might as well have said that the sky is blue, grass is green, and roses are often red. His prognostications are so obvious that I can’t believe he would label them as predictions, nine years out!

What did Hansen have to say? This time, having the same complaints with transportation, he overlooked the obviousness of Lohfeld’s prognostications and simply noted that transportation, especially within the context of an increasingly global supply network is a linchpin component of an overall logistics and supply chain strategy. It is in essence the glue that holds the interconnecting elements of the end-to-end process from raw material extraction to manufacturing and through to distribution and, as a result, cannot be overlooked in any piece that looks into the future of Supply Management.

All I have to say is that logistics are always going to be an issue. First of all, not only is there not enough logistics infrastructure in many parts of the world, but the rate of new construction is not keeping up with demand — which is expected to increase substantially in line with global population increases and rising automotive sales in emerging marketplaces. Secondly, there are projections of significant talent shortages in logistics in the coming years as the baby boomers retire. Thirdly, global trade is going to continue to increase. Everything points to logistics challenges for at least the coming decade, if not longer. And we’ve all witnessed the increasingly slow pace of infrastructure development in North America in recent years. Prepare for the unending challenge.