Procurement Is Dead! Long Live Procurement! Part I

Mr. Smith is right. Procurement, which was very recently Doomed! Entombed! and Marooned! on a desert island is dead. While it fought valiantly to survive, in the end, it passed away peacefully in the night after everyone stopped caring.

Your career is over. Just be thankful the Romans sealed up the burial chamber of the Egyptian empire and you will not be buried too.

Your ability to remember which catalog among the 200 on the wall contains the part that is needed, where it is, and what section it is in; instantly locate it, and place the order as soon as the request comes in has already been forgotten. With Amazon for Business (in America) and Alibaba (in China), anyone can instantly find the part they need and place an order for next day delivery.

Your ability to quickly create an RFP template, print out 3 copies, customize an opening for the top three suppliers the organization will typically do business with, and get them faxed out (and followed up on with a phone call) faster than most people can figure out how to copy a single page on the over-complicated copy machine is no longer appreciated. With a few clicks of the mouse, anyone can use a modern freemium RFP tool with integrated mail merge and e-Fax to create an RFP, send it to a dozen people, and print out a call list for the intern to follow up on. 3-bids-and-a-buy is reserved for tail-spend spot buys that would normally be done off-the-cuff with the first vendor that comes to mind.

Your ability to step into a negotiation with a contract manufacturer and, after hours and aggravating hours of hard-nosed carrot-less stick negotiation come back with an offer 5% lower than the Engineering team was expecting is remembered, but now that detailed cost models demonstrate that you are still overspending by 10% (and that the supplier always inflates their offer knowing you’ll be happy with a 5% reduction), even a junior negotiator armed with cost models and the facts can get the same result (and they only get half of your salary).

Your ability to manually process the mountain of requisitions, purchase orders, invoices, and goods receipts that come in everyday in a pseudo-timely manner, when everyone else fears to even enter the room, has been antiquated to the history museum as cloud-based m-way match systems can not only process 100 times the paperwork in near real time, but identify the errors in 90% of the invoices that come in with errors (which can be 15% of invoices in an average organization). Properly configured, this leaves a clerk only 2% of invoices (with more than minor errors) to be manually processed, and even the most junior of clerks can do this.

The reality is this: just like the industrial revolution put an end to the armorer, blacksmith, glassblower and other medieval occupations, the internet has officially put an end to the Purchaser.

Procurement is Dead!

To be continued …