Our panel of procurement experts share their secrets for achieving stakeholder alignment on your indirect purchasing approach
Despite the best-laid plans of procurement teams around the UK, the implementation of a successful indirect procurement strategy can be limited if internal stakeholders are not aligned. According to recent research by RS and the Chartered Institute for Procurement and Supply (CIPS), only 26% of procurement professionals feel that there is high alignment between stakeholders with the purchasing approach.
This will not come as a surprise to many in the industry, given the complexity of MRO procurement and the competing priorities within different departments of an organisation. Nevertheless, as businesses and the procurement team face greater pressure than ever to deliver cost savings, it is essential to address the issue of stakeholder alignment and bring about a joined-up purchasing approach for MRO products.
According to Helen Alder, Head of Knowledge at CIPS, the key is to improve soft skills to better communicate with other parts of the business. “Twenty years ago, it might have been fine to have a procurement person who was really good at finance and analytics and would sit in a dark room and not talk to anyone all day, but that has totally changed,” she says. “At CIPS, our members who flourish are those who are on the board, are good at marketing themselves and communicating, and add value.
“These people have their teams out in the business working with different departments and place much more emphasis on soft skills and marketing procurement.”
“We involve stakeholders from across the business in tender events so that they have some ownership of the contracts” Rob Woolley, Directs Category Manager at Cadent
Rob Woolley, Directs Category Manager at Cadent, agrees. “We run tender events in line with the utility regulations that can take anywhere from six to ten months to complete, but one of the key parts of that is we always say procurement are not running the tender event: we are facilitating it,” he says. “We put together a tender team and invite stakeholders from across the business. They are engaged all the way throughout, so it isn’t a case of them giving us the spec and I will go and buy it. We collaboratively produce the specification and they are involved in the evaluation, which may include site visits, product trials, etc.
“We do this so that stakeholders have some ownership and then when we have awarded the contracts, if nothing else it takes away their ability to say, ‘You have put this contract in place.’”
Another business trying to take a proactive approach to involving stakeholders is brick manufacturer Ibstock. The firm’s Category Manager, Kevin Cheetham, doesn’t believe in sitting in a darkened room with a calculator. “Being visible on our sites is essential,” he says. “We don’t sit in the office five days a week, pick up the phone or send an email. We actually get out there and engage with stakeholders, the engineering managers, and ask them what their issues are.
“In addition, we use rebates a lot,” he adds. “We go to great pains with our finance people to try to ensure that the rebates from the savings that stakeholders make the company are funnelled back to the sites.”
“We don’t sit in the office five days a week – we actually get out there and engage with stakeholders” Kevin Cheetham, Category Manager at Ibstock Brick
A close working relationship with front-line engineers is vital for an effective MRO procurement strategy, but changing practices can be a slow process. “I think the relationship between procurement and the engineers is crucial,” says Mike England, President EMEA, RS. “You need to find ways to show stakeholders that the procurement strategy of vendor consolidation is aligned to the long-term engineering and maintenance strategy.
“Technology should help the process but there is a balance to be struck between the human connection with procurement, operations management and engineering, and how technology and data will ultimately support that,” he adds. “Arguably, I would say that neither is usually aligned. Human interaction isn’t aligned, and neither is the future strategy of data and technology.”
England is a firm believer that organisations and suppliers such as RS will achieve that alignment, but that it will take work and a willingness to co-operate. “I don’t think we can get away from the fact that over the next five to 10 years there will be the expectation that somebody can pick up their mobile phone, find what they need and place an order,” he says. “There needs to be a mindset shift away from the traditional way that purchasing and engineering have worked, towards one that will be in a much more technically enabled world.
“The challenge for all of us – businesses and suppliers – is to put ourselves in the shoes of an engineer in five years’ time and work backwards.”