So, hopefully now you understand why we’re all zombies. Procurement was supposed to be dead and buried two years ago (search the archives), but instead of the Procurement Phoenix rising from the ashes and blazing a new course, nothing, and we mean nothing, has changed.
Day by day we’re going through the same old motions, using the same old processes, dealing with the same old issues, on the same old platforms.
First of all, why are we using the same old processes. While the intent of Procurement has not changed since the first Purchasing Manual was written back in 1887, the nature has. We’ve gone from vertically integrated companies with relatively local supply chains (where only raw materials were imported and only when necessary) to horizontally distributed supply chains where everything can be imported and exported through every step of the chain and where there can be three or four levels in the chain.
Secondly, why are our suppliers still okay with this? Presumably we’ve learned a few things in the past one hundred and thirty years or so? Presumably we have better processes for managing the entire source to contract to delivery to return to rinse and repeat cycle. And presumably we can use that knowledge in our dealings with them and make things better for them as well as us.
Thirdly, and most importantly, why aren’t we using platforms that enable these better processes both for us and our suppliers?
Well, unfortunately, we already know part of the answer here. As per our recent series on how 2020 is Fast Approaching (and that you better get on your tech capabilities), modern platforms are nowhere near where they were supposed to be. That does limit what you can do and the experience you can provide them.
But that’s not the whole answer. There’s also the fact that most of you aren’t on the best platforms you could be on, most of which are very limited in supplier relationship capabilities — which is key to building supplier relationships and making them want to use the platforms.
But you can’t put it all the vendors, as there’s also a third side to this story. You’re not insisting enough that your vendors get better. And you’re definitely not doing it from day one. Threatening to switch at renewal time isn’t much of a threat to the vendor when they know the sunk cost and the cost of change is high and that you’re not likely to be allowed to do it.
If you want to scare them, you have to take it up a notch. Threaten to tell the supplier the real reason their experience is so poor and all the faults of the platform you’re using — remember, your suppliers need platforms too. But that’s not the real answer (especially if you didn’t read the contract carefully and/or you agreed to a no disparagement clause).
The real answer is to make sure, at contract (renewal) time, you put a mandatory platform improvement clause in the contract with necessary features and functionality the supplier must deliver, on a schedule, or you get to either a) use the platform free until they deliver or b) leave at any time with no penalty and take ALL of your data with you, which they must output in its entirety in a well defined and documented database and/or (x)MXL schema that you can take anywhere.
Then you’ll get the platform you need to support more modern practices which may allow you to eliminate the same old — tactical based — issues, which result from poor platforms and poor processes.
Will it solve all your problems? Heck no. But maybe, just maybe, you’ll have a lot more time to focus on the real fires … instead of constantly having to deal with ventilating the smoke.
How? To be continued …