For this piece, I’m going to pick on a recent post, and graphic, from James Meads. Not because he got the models wrong, they’re perfect, but because neither are appropriate for today’s Procurement. We’ll first discuss what, at a high level, the right model actually is and then discuss what ALL models miss that is key for Procurement success.

In short, it’s a blend. It’s a model that shoots for the ultimate expression of what Procurement should be in a perfect world, while accepting the reality that the world is not perfect (and there ain’t no living in a perfect world anyway) and you have to function accordingly. To explain this, we’ll tackle each of the six dimensions and explain why entrepreneurial procurement, the perfect model for a perfect world, is not always the recipe for success and why, occasionally, it’s no better than the old-school technocratic procurement most procurement departments are still stuck in (which, while successful yesterday, is no longer successful today).

Let’s start with goals. It’s obvious that yesterday’s technocratic goals of cost savings and compliance are not a recipe for success, as the emphasis they place overlooks risk and resilience and sees Procurement being involved too late in the process to have any significant impact on total cost. On the flip-side, it’s not all innovation and value-creation — innovation can take years to from ideation to reality and value-creation usually involves new service offerings which rely a lot on suppliers who will need to be developed to get there. That’s why success is a balance between the original goal of Procurement — supply assurance (because No Sale, No Store) — and value generation. It’s conceited and absurd to think Procurement is the source of all value creation in an organization. It’s not. But it is the source of all value realization and generation — because it’s up to Procurement to acquire the required products and services in perfect orders where, when, and at the right TCO that is required for the value realization, and, preferably, at lower cost and higher quality than budgeted for to generate additional value beyond what was expected. It’s a fine balance between aspiration and cold, harsh, reality.

Now we’ll move on to process. The process should be engineered in a layered fashion that builds on must-have, should-have, and nice-to-include steps that, when layered and strung together completely defines a well engineered, almost rigid, process that a junior buyer new to the category can follow and be guaranteed success in typical market circumstances; that an intermediate buyer can strip down to the should-haves, adapt slightly to current market conditions and time-constraints, and use their sourcing experience to take advantage of the specific market conditions and/or an expanded supplier pool; and that a senior buyer with category expertise can strip down to the absolute must haves (engineering part verification, mandatory compliance requirements, etc.) and execute rapidly in an emergency situation. Not all categories are created equal, and the degree of agility and flexibility that can be supported is highly dependent on the category, the market conditions, the buyer’s experience, and urgency of the need. For example, you can’t be 1mm off in (electronics) hardware acquisition. But if the paper/posters are off 1mm from specs, who cares!

Mindset needs to be balanced between the reality that can crush you (and even bankrupt your organization on a bad, experimental, sourcing decision) and the future state you hope to some day achieve. While being too risk-averse can close off the discovery of great new suppliers with great new production methodologies, or great new software technologies to accelerate your Procurement (capability), being too experimental and open-minded can lead to decisions that ignore emerging risks that can result in supply lines suddenly disappearing, production lines going down, and losses in the tens of millions. In an age where geopolitical tensions are at an all time high, tariffs are materializing daily, sanctions are one retaliation away, shipping lanes are being cut off by terrorist activity (Red Sea) and lack of rainfall (Panama Canal), and your entire rare earths supply is one dictatorial decision away from disappearing, you have to be risk-centric in all your decisions. For critical products, you can’t increase risk if they are (primarily) sole-sourced (or primarily dependent on a sole-source somewhere downstream).

Technology is not about UX, because that ultimately comes down to UI for the majority of users, and that results in the prettiest system being selected. But you have to remember, it’s not about pretty, it’s about function, and if you want success, remember what the Northern Pikes told us 36 years ago when you’re selecting tech and being sold a flashy UI: she ain’t pretty, she just looks that way. You want something easy to use, but first and foremost it has to do what you need done. It HAS to support the process. UI/UX ONLY comes into play once the baseline functionality has been established. (And if someone won’t learn the necessary processes and systems required to ensure success, they should be replaced. That includes Chat-GPT addicts who prefer cognitive decline to actually trying to learn and improve!) Furthermore, the technology must be more than just configurable (using adaptive rules), but it must also be agentic so that, once appropriate rules are defined [and exception cases identified], it can run automatically so that, over time, the buyers spend less and less time on tactical tasks and more and more on strategic decision making, supplier development, and value generation and realization. Finally, it must not just be “connected” but be “concentric” and be built to be connectivity-first so that it can sit at the center of all of the organization systems that contain the data Procurement needs to do a proper analysis and make the right decisions.

Supplier Focus should definitely lean towards partnership and growth, but “partnership” and “growth” are nebulous and subjective and fuzzie-wuzzies don’t guarantee that the relationship is valuable to the buyer and definitely don’t provide a foundation for joint value growth for both parties over time. While there must be a joint commitment to improve, the focus needs to start with 360 performance measurement which become the foundation for jointly created and agreed upon development plans that will increase value, and it must continue with a constant eye out for risks and the development of mitigation and remediation plans should the risks become significant. It’s not about touchie-feelies, it’s about true value realization over time.

Finally, while the organization wants to be seen as an indispensable business partner, there’s no way that’s ever going to happen if it’s not seen as a source of value. And even if it is, considering Procurement is always going to come with process, overhead, and forced evaluation before a “preferred choice” can be selected, organizations like Marketing, IT, etc. are never going to see it as an IBP. But as long as the C-Suite sees it as a core source of value, it’s utilization is always going to be mandated!

In short, while theoretical perfect-world models are great in theory, and do a great job of giving us something we should want to strive for, success requires not forgetting the reality that surrounds us and in an age where free trade is crumbling, supply sources are at risk, and supply lines are crumbling. We have to be reality first to ensure supply, which has again become Procurement’s most critical function. Nothing else matters if there are no products or services to sell because critical supply sources/lines disappeared and Procurement wasn’t ready to replace them.