The world is changing, and supply chains are getting more and more complex. Do you know how your commercial supply partners can better support your council? Are you meeting regularly with your key supplier sales representatives? I’m conscious that in the interest of time, some procurement managers may be avoiding them. Even worse, they may fail responsibility by telling ‘reps’ to talk to the Stores staff (no disrespect to them) or other non-procurement staff.
As procurement staff, our role is to maximise the buying position of our organisation. At the simplest level, we need to balance out quality, price, and delivery to get best value. But don’t we keep arguing things like procurement is a profession, we should have more influence, etc.? I’m going to suggest to you that improving our worth starts with us expanding our curiosity and seeking more knowledge about the commercial environment around us.
The procurement person that fails to meet with the key supplier representatives on a regular basis does themselves a disservice. They miss:
• Opportunity to understand what is happening in different supply chains (particularly relevant at the moment)
• New or alternate products and services
• New entrants to a market
• Specialist software and services that the supplier can offer
• Information about the supplier’s competitors e.g., who’s in financial difficulties, closing down, etc.
• Strategic data
• Vacancies and staff change in the marketplace
• Early warning of impending supply shortages and price increases.
At a strategic level, there may be information about market size and council’s influence as a buyer in that market, or significant changes in local government interstate. These may be useful pointers enabling us to pre-empt our management as to positive or negative changes. Even better, we might find ways to implement more effective supply contracts and price consistency in this new, inflationary market.
I was always frustrated by the inability of council ERP purchase systems to provide the level of reporting data that I needed. In sales organisations, they rely on this information. Hence there is more input and thus statistical report capability about council purchases than might easily be obtained from council’s system. Volumes and $ expenditure based on categories or individual products can improve the packages you put to market for quotation. You might be able to pick up rogue expenditure taking place outside of your preferred supplier agreements or even significant purchases which did not comply with council policy or which did not offer best value. I commend you run a report on annual council expenditure by supplier and determine your top twenty suppliers. Make sure you develop a level of ongoing contact with the relevant sales representatives and talk strategic with them.