Procurement 101Using History to Make (Good) Decisions About Procurement
The Golden Age of procurement is upon us and it’s about time. We only had to suffer through several centuries of fanciful art, literature, and (more recently) cinema, not to mention the ramblings of philosophers and poets, before the world of corporate purchasing was given an opportunity to cut through all that shimmery idealism like a prize-winning steer through daffodils.
That being said, savvy companies are starting to view procurement from the rose-coloured window of history. The reasoning behind this comes down to a simple idea: the past informs the future. Historical reflection generally improves the trajectory of subsequent events.
Consider WW1 and WW2 – the ability to obtain the raw materials and services needed to keep factories and mines operating was a key determinant of organizational success. The feelings of desperation generated by wartime conditions emphasized the necessity of a flexible supply chain in the purchasing process. Buyers had to be able to improvise. Suppliers had to be inventive. A war doesn’t have to be raging to inspire this mentality, however a little interactive nudge always helps.
Historical Lesson: Today’s procurement teams might want to practice air raid drills, drink their own urine, temporarily disconnect electricity, locate the nearest bomb shelter, and shroud the entire office in blackout curtains to appropriately set the mood.
Procurement in the 1970’s introduced a new pressure on the industry: environmentalism. Various corporations, propelled by social movements boycotting their bottom line, were demanding to know more about the products and services they were purchasing from suppliers. Is the product ethically sourced? Is it certified by such-and-such organization? How’s the environmental footprint? Was that bulk order of industrial steel blessed by a convoy of Tibetan monks? A successful business had not only answers, but the most virtuous ones. A modern procurement team should follow suit – after all, environmentalism has only increased in desirability.
Historical Lesson: Consider sending the most annoying member of a purchasing team on an “unpaid vacation” through the supply chain. This will likely involve some unsavory experiences: swimming through oil spills, navigating around destroyed natural resources, and if particularly unfortunate, the smuggling of Blood diamonds and ivory. Once/if the employee returns, it will be nearly impossible NOT to practice environmental stewardship (as a means of slowing the whining and squealing from said employee).
Obviously, using history to help make decisions about procurement is a wise choice. The industry may have made mistakes in the past, but its moments of ingenuity can guide future purchasing professionals to greatness. Always reference the historical lessons, or even better, recreate them for firsthand wisdom.
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