In our last post we noted that the purpose of Procurement, which is at least the world’s fourth oldest profession, hasn’t changed since the first handbook was written 138 years ago (even though the world has changed), is not hard to figure out or explain, and can be put forward with an explanation so simple that even a hillbilly building a moonshine empire could completely understand it.

We published this because we want to cut the trend of the Procurement One Pager off before every consultant AND influencer does their own version, with their own jargon and KPIs up and down the ying-yang, that isn’t going to help anyone when plain language will suffice for getting someone started and at least 80% of the way to best-practice, if not best-in-class.

To demonstrate this, we are going to translate our hillbilly one-pager into techie and procurement speak so you can see we got it right.

Purpose:

Git ‘R Done!: Support the Organization In What They Need When They Need It

Objectives:

1. Pinch Those Pennies: Avoid Unnecessary Costs
2. Don’t Run Out: Supply Assurance
3. Don’t Be Evil: Sustainability and Human Rights
4. Stay Classy: Quality, Corporate Social Responsibility, and Supplier Development

Initiatives:

1. Follow the Money!: Spend Analysis and Category Management
2. Get Haggling!: Strategic (e-)Sourcing and Contract (Re)Negotiation
3. Hunt Those Rascally Coons!: Process Analysis, Stockout Analysis, Disruption Analysis, etc.
4. Regular Barn Dances & Hoedowns: Customer Feedback and Workshops, Supplier Development and Innovation, etc.

KPIs:

1. Pennies Counted: Spend Under Management
2. Pennies Saved: Savings and Cost Avoidance
3. Raucous Reductions: Stockout Reduction, Disruption Reduction, Sourcing Time Reduction, Invoice Processing Time Reduction, Straight Through Invoice Processing, etc.
4. Supplier Improvement: Defect Reduction, On Time Delivery Improvement, Year-Over-Year Cost Reductions, etc.

Getting to Work

Penny Pinching:

1. Spend Analysis
2. Market Intelligence
3. Category Management
4. Strategic Sourcing and Procurement
5. Contract Negotiation Management

No Running Out:

1. Inventory Planning and Management
2. Contract Execution
3. Procurement Automation
4. Supply Chain Visibility
5. Risk Monitoring

Not Being Evil:

1. GHG Carbon Management
2. Energy and Water Sustainability
3. Recycling and Waste Minimization
4. Equality and Equity in your Company and Supply Chain
5. Human Rights and Worker Wellfare Assurances
6. No Pollution, including Noise Pollution

Staying Classy:

1. Quality and Safety Focus
2. Constant Push to Improve Performance
3. No-Profit Supplier Development and Customer Workshops
4. Charitable Donations and Community Building

Let’s cut this trend off before every consultant AND influencer does their own version, with jargon and KPIs up and down the ying-yang (which you definitely need for system selection, which is something we will discuss in series to come, and partially need to appease management, but need very few of to actually do your job).

Since the purpose of Procurement, as one of the world’s oldest professions (and while a specific instance of sales is claimed to be the world’s oldest profession, which would make Procurement the second oldest, this overlooks the fact that all early societies had astrologers and religious leaders often before they bought and sold, which means it might only be the world’s fourth oldest profession), hasn’t really changed since it started thousands of years ago, and definitely hasn’t changed since the first handbook was written 138 years ago (even though the world has changed), it’s really not that hard to figure out or explain.

To drive this point home, we’re going to capture the core in an explanation so simple that even a hillbilly building a moonshine empire could completely understand it.

Purpose:

Git ‘R Done!

Objectives:

1. Pinch Those Pennies
2. Don’t Run Out
3. Don’t Be Evil!
4. Stay Classy

Initiatives:

1. Follow the Money!
2. Get Haggling!
3. Go Hunting for those Rascally Coons! (that mess with the systems)
4. Regular Barn Dances and Hoedowns

KPIs:

1. Pennies Counted
2. Pennies Saved
3. Raucous Reductions
   (because a smooth still is a productive and profitable still)
4. Supplier Improvement

Getting to Work

Penny Pinching:

1. Sum the Pennies by Supplier-Product and Supplier-Service Pairing
2. Eliminate those pairings where there is a contract
3. Ask Cletus, Earl, Sadie, and Mabel how much they are paying
4. Eliminate those pairings where you are paying what everyone else is (or less)
5. Order what’s left from biggest to smallest and get haggling
   1. Get Cletus, Earl, Sadie, and Mabel to share their information at the next trailer park BBQ
   2. Call up the vendors and get those quotes
   3. Set up a few cookouts and meet with the best suppliers
   4. Shake on the best deal

Not Running Out:

1. Track the inventory utilization by day
2. Use the curve to plan what you need when
3. Based on the suppliers lead time, Joe’s delivery time, your order costs, and your supplier’s production costs, figure out the right order size and frequency and plan your orders

Not Being Evil:

1. Make sure you ain’t wastin’ any water (it’s precious and you need it for your stills)
2. Make sure you ain’t wastin’ any energy (you need that wood for your barn and that coal for your BBQ)
3. Make sure everyone is treated the way you treat your trailer park crew
4. Think about your neighbors (and keep the noise down)

Staying Classy:

1. Regularly test your product for quality, safety, and performance
2. Regularly invite your customers to hoedowns to get their feedback and suppliers to barn dances to help them develop their buck dancing, flat footing, clogging, and square-dancing
3. Give generously to the orphan’s fund and the alligator preserves

It’s stupid simple to get started on good Procurement. Don’t over-complicate it!