Rise and fall of the Purchasing function - how can it stand firm?
Even reasonably experienced buyers are working with a mixed bag of results e.g. savings are achieved but not on time delivery; all supplier performance scores are good but stakeholders are still complaining...
Ever tried predicting the most likely answer when you ask reasonably experienced buyers, "How is it going for you in the purchasing area?" I consciously tried to keep a simple record for the answers I got after listening to over 200 folks so far. The most common answer I found sounded like this "We keep on doing good and not so good at the same time". The answer sounds so vague and nebulous - doesn't it? Or are our dear friends struggling to articulate a right answer to such a simple question?
Further questioning provided clarity. What they tell is usually right and yet paradoxical. Most of them always work with a mixed bag of results e.g. savings are achieved but not on time delivery; all supplier performance scores are good but stakeholders are still complaining etc. But why does this happen? Why can't each performance parameter look green/100% achieved in their BSCs? It is usual to see tactical responses to this e.g. our demand keeps on changing so much without warning; our suppliers are doing their best but still.....etc.
Actually the answer is simple. It's all about building & sustaining all the required capabilities. A famous HACKETT 2010 report titled Procurement Capabilities - The DNA for procurement value addition, lists 300 capabilities that were found as causal factors behind getting a particular performance level (an effect) that is measured.
Seek external help or do it yourself to build these capabilities on a sustainable basis. Till then - difficult to keep rising (favorable) Purchasing performance levels. Bon Purchasing!
