NAVIGATING SUCCESS: CREATING A COMPREHENSIVE BLUEPRINT FOR PROCUREMENT EXCELLENCE
The Purchasing Process
In designing guidelines for a procurement function, this is probably the heart of the matter. What exactly is the process to be followed when user departments need to issue requests? As basic as some of these things seem, you will find that many organizations do not define them clearly, thus leaving room for misunderstanding, and ambiguity in the process.
When I join a Procurement organization, one of the first things I like to do is to review the policy to ensure that it conforms to “best practice,” and then organize roadshows across every user department where I explain the policy (including the purchasing process) and take inputs from these stakeholders on how we can best work together. It is unfortunate that some procurement processes remain shrouded in mystery and departments who require our services are made to grope around in a minefield trying to avoid being caught in a violation.
How many of you have been caught out by a traffic sign you did not see? You know those spots where law enforcement officers suddenly appear out of nowhere and “confront” you for a violation you didn’t even know you committed? How did it make you feel? This is what our stakeholders experience when we do not clearly document our processes and share it with them. Every unit within the company should participate in these “procurement process roadshows,” and should have access to updated copies of our policy and guidelines, including references, templates, and toolkits; these should all be stored on a shared drive preferably.
The purchasing process is a workflow of tasks and dependencies to be followed when engaging with the procurement department. Timelines and responsibilities for each task should be agreed and detailed for everyone to understand and comply with. Everything that needs to happen from when a need is created up until a Vendor is paid and evaluated should be documented and laid out like a map. People who interact with Procurement need to know where to go and how to get there.
You should also list the types of requests your organization sends to Procurement for fulfilment. You cannot treat every request in the same way. If you have a process that restricts you to competitive bids for every transaction for instance, you will struggle with requests for OEM equipment, housing, or warehouse leases for instance. Itemize every type of request you have received and put them in categories. Determine the most effective way to handle these requests and document a process that drives value for your company. Include this in your policy document, seek alignment with your stakeholders, and get it signed off.
There are many sources you could reference for purchasing processes – the CIPS website (www.cips.org) is a great place to start. You will find a lot of helpful documents that can be customized to suit your needs. You can also engage the services of an experienced consultant to help optimize your internal processes.
If you keep Procurement principles and ethics at the core of your operation, you can be flexible with the methods you use. Our objective is to deliver value within the framework of best practice and global standards. Do not attempt to participate in a boxing match with your hands tied behind your back.
