We would also like to use this edition to put the spotlight on the committed and knowledgeable team of specialist Procurement consultants from PSD's Procurement practice who have developed an enviable track record of success in senior level recruitment. Encompassing all executive, management and board level roles we recruit CPO's, Procurement/Supply Chain Directors, Head of Procurement, Category/Procurement Managers, Supply Chain Managers through to Senior Buyers. PSD provides search, selection, contingency, interim and contracting services. Established in 1992, our Procurement practice comprises 30 consultants in locations worldwide with individual specialists dedicated to a specific sector.

If you have any questions about the points raised in this newsletter or if you would like to contribute to the next issue please email me at paul.mcintyre@psdgroup.com.

The salary survey was compiled from a response to a questionnaire from 520 procurement specialists and showed an number of interesting traits.
These included the fact that basic salaries for procurement professionals had continued to rise well in excess of the National average in the current economic climate. This is due to there still being a distinct shortage of true talent in the procurement field and organisations being prepared to pay to either retain their own highly regarded employees or to tempt in those with a good reputation.

Bonuses are still achievable for those that can demonstrate true value add although these have fallen in terms of percentage levels which was to be expected as those within the banking sector must fall in line with the rest of their organisation.
Talent is still prepared to make the move but there must be some strong distance between what is on offer and what they are currently receiving.

Whilst London still heads the table in terms of levels of pay there has been a slight narrowing of the gap form some of the regions and there is certainly the need for more procurement talent to populate the North West of England!

The Interim Report was conducted separately amongst 700 contractors and showed fairly substantial drop in day rates on offer and a slight increase in the length contractors were having to endure in between each assignment. There is however still a strong demand for contractors and this was borne out by a significant number of permanent employees moving to the contracts market to reposition their career paths in 2011. Contractors with specific category skills are still able to command a premium and obtain longer term projects but for ‘Business as Usual’ contractors there is always the possibility that budgets are squeezed and their contracts are cut short which is not the most positive environment in which to show your true value.

Both surveys covered a number of other interesting areas but the final note for both surveys was that whilst we have all been experiencing more challenging circumstances than ever before, there are now growing signs that a platform is forming from which growth can once again happen.

If you would like further information or a copy of the surveys please contact Stephen Fletcher:
Stephen.fletcher@psdgroup.com

As a professional interim manager operating at a senior level within (many) a number of businesses both in the UK and abroad, I would observe that the awaited tipping point where each and every business fully recognises the contribution that Procurement has to offer, is yet to arrive. Quite simply, many businesses – most even, do not.

Why is this? Which business does not currently wish to save money; to better manage their cash; reduce their WIP and inventory; improve and develop mutually beneficial relationships with their supply base; reduce their logistics expenditure; streamline their supply chain operations; reduce waste and improve their carbon footprint; enhance their operating efficiency and minimise their indirect expenditure amongst other activities?

Saving money, increasing efficiency and capturing supply chain benefits should not be a hard sell.

Having pondered those questions for a moment, next consider the following:- Why is it that our professional bodies – CIPS – IAAPS – have still not fully accomplished the positioning of our profession – the messaging, the branding, the drumming up of demand for our services? I ask, because quite frankly, too many businesses continue to operate at levels which routinely fail to optimise their external spend; levels which fail to capitalise upon the skills and expertise their suppliers have to offer; level s which fail to optimise their logistics, materials management and supply chain costs and as a consequence they fail to secure the efficiency improvements which would underpin their own financial performance (imperatives).

Why is it that in many businesses, procurement remains a hard sell to the key decision makers? That numerous MD’s and FD’s are yet to believe that investment in procurement excellence is an investment worth making? In other words, why is it that these business leaders do not perceive an adequate ROI (return on investment) in professional procurement? Given their generally sound commercial acumen (hence why these individuals lead organisations) ask yourself, why can’t many senior leaders perceive value in procurements offering – in short - what is it that they are missing? What is it that we are failing to convey about the value that we can add to their businesses?

Consider the following:- as a profession, we regard a CEO who “gets” procurement as being “a visionary” to be lauded when, in reality, this simple truth serves only to highlight the opposite - how many CEO’s just do not understand the magnitude of what can be achieved when a Company’s expenditure is professionally managed.

Perhaps it is time for the Procurement Profession to take a step back and consider whether there are any fundamental reasons why professional procurement is still not as highly regarded as we in the profession would like to believe that it should be. Where is the disconnect that, even today with rising inflation, currency and commodity volatility, increasing energy and transport costs and growing youth unemployment, falling/stagnant inward investment and growing developing world markets - the message that competent procurement professionals are capable of mitigating and managing these areas on behalf of the rest of the business is being overlooked? Supply Management recently ran a cover story (Nov11) claiming that the magnitude of this lack of reform to UK Plc was a cool £37bn. Even if we a assume an aggressive 10% average saving level, the implication in the CIPS figures is that there is some £400bn of spend within the UK which could be better managed (a massive £1 trillion if you assume savings of just 4%). My question is simply this – given the size of the prize what is it that the senior decision makers are failing to see in the offering that Professional Procurement presents? Why is it that collectively these rational business leaders are content to squander the additional £billions Supply Management identified rather than pursue better, if not best practice (practices incidentally which we also like to ensure are defined by us!)?

Could it be that the fundamental reason is because senior stakeholders do not view the world in the same way as we want them to? Are they unable to perceive the value that Purchasing and Supply teams constantly tell them they are receiving? Is it because too many Procurement teams only want to be associated with good news, price reductions for example whilst seeking to distance themselves from perennially problematic areas such as fuel costs which trend upwards thus offering few easy to quantify and measure savings? Should we as a profession take time to consider whether the metrics Procurement teams regularly rely upon to measure their achievements and to convey their message are in fact held in the same high regard by the rest of the business team? It would appear from my own broad experience that our metrics are not highly regarded – indeed many businesses struggle to recognise the savings that their procurement teams claim to have delivered. I see so many examples of offline trackers, bespoke homemade excel sheets used to measure savings that lack dynamic interface with the underlying transactions which drive the rest of the business that it is no wonder that confidence is lost when it is impossible to automatically reconcile back to core data.

I believe that during these difficult times there is an increasing need for businesses to significantly enhance the quality of interface with their supply base, not just within simplistic and narrow pricing negotiations, but far more importantly within the complete value chain that encompasses both their own as well as their suppliers supply chain structures. Nothing new there, nothing radical, new world sages such as Michael Porter (1985) have proposed such an approach for the best part of three decades now.

So my question of Procurement Professionals and our Professional Bodies remains, what is it that prevents so many senior business leaders from embracing the promise and potential of professional procurement? Why have we not been able to better articulate that the skills and competencies our profession has to offer can demonstrably enhance the bottom line for Company Leaders and their businesses? We should consider what factors are in play that prevent the claimed £37bn of potential savings from being actively pursued by those businesses overspending that tremendous sum? I do not for minute think that the sole reason can be that all these business leaders do not “understand” the opportunity; that they do not “get” procurement. On the contrary, I think many of them understand their business full well and yet in many instances they do not completely trust their procurement team to manage sensitive areas without disrupting the smooth running of such. Does their reticence reflect a crisis of confidence in our collective abilities – and if so what is our profession doing to address the misunderstanding? What are the factors which lead to the belief that Budget Holders are better positioned to make sourcing and supply chain decisions than a professional procurement team – we should note that Budget Holders do not even have a professional body to represent their interests! Obviously and I must say, very encouragingly, there are a wealth of examples where Procurement teams do work collaboratively and productively with the remaining business areas in order to secure true competitive advantage for their respective businesses and it is these teams and individuals which we should be striving to emulate, elevating the conversation above that of simplistic price reductions, stretched payment terms, cost lock downs, poor outsourcing, rebates and the like. The £37bn statistic quoted by CIPS continues to imply that far too many leaders, who throughout their own careers have encountered procurement at many levels as they progress through their respective business hierarchies, still do not regard Procurement to be an indispensable partner to have in the Board room. In short – there remains too many leaders who are not convinced that the Procurement profession is ideally positioned to maximise the contribution that could be made for their businesses.

As such, I feel that we owe it to ourselves to stop and rethink how that impression can be overturned. It could be argued that a rather fundamental part of what our professional bodies should be doing for those of us working at the front line in return for our annual subscriptions should be the advancement of those arguments. Time and time again, I and my colleagues encounter businesses which remain incredibly sceptical as to the value that professional procurement can deliver. Rarely do common metrics against which performance can be measured and agreed exist. Frequently it is Budget Holders who are seen as the guardians of a company’s external spend, these individuals are typically the senior functional head of the business area or unit and are valued for their technical excellence in managing that function rather than their ability to design, structure and implement procurement strategies. These individuals are typically unlikely to hold influence across the broader business group – thus for example consolidation opportunities frequently pass them by. Yet, because of the confidence that business leaders have in these individuals, it is they who are broadly regarded as the “go to“ people for making spend decisions within those businesses that trust this model; the procurement team fulfilling the role of transactional buyers simply implementing the decisions made previously by the Budget Holder.

Technical skills remain our own personal responsibility, so too interpersonal skills such as influencing and managing people, the areas where I feel our professional bodies could better represent us is in the advancement of the top level debates concerning how we can be most effective as a profession in meeting the real needs that a business has, rather than the needs that we would like them to have (no seats on the Board for that). Only when the services and skills we provide are readily and regularly recognised and valued will the invitations to participate at the most senior levels occur as the norm rather than the exception. The recognition we desire can continue to be achieved sporadically by competent individuals and small teams in a fragmented, unstructured manner alternatively, our professional representatives could seize the initiative and devote their time and energies to making a real step change in this area that would benefit all who have the pre-requisite skills to deliver against the legitimate expectations of our most senior stakeholders.

I believe that current economic circumstance demands that Procurements moment has arrived, I remain to be convinced that we have positioned ourselves to capitalise upon that fact. I perceive a lack of confidence within business generally when it comes to delegating tangible authority and responsibility to a Procurement function. As a profession, I feel we need to do better to capture the moment and that we should refocus now in order to achieve just that.

From these modest beginnings, the role initially evolved to encompass the tactical buying of materials and goods (Directs), and latterly to embrace the fragmented world of intangibles e.g. Marketing Services.

This evolution is not just a simple expansion of sphere of influence, but includes a raft of associated processes and skill sets that have, through necessity, accompanied and contributed to the rise of Procurement.

A common theme in contemporary Procurement literature (or Procurement recruitment advertising for that matter) would have you believe that process and skill sets are highly tuned (and deployed in a focussed and effective manner) and that Procurement itself has undergone a renaissance from a tactical to a strategic function.

Although undoubtedly there have been significant advances on both these fronts, there is still much to be achieved. Further positive progress requires a healthy dose of self-analysis and honesty within the profession and a redirection of emphasis allied to a continued development of skills and methods of working.

The historic speed of evolution of the Procurement function was brisk, but recent economic conditions have acted as a potent catalyst, and accelerated the process at an even more rapid rate. The demands that accompany such meteoric development pose significant challenges in themselves, but doubly so when the goal oriented environment lends little opportunity for reflection and self-assessment.

Within many FMCG organisations the Procurement function has risen to occupy both high profile and influential positions. It is commonplace to find CPO’s on the Board or Executive Committee. Frequently, underneath them sit a number of senior category specific Procurement heads, working across the business, and charged with delivering quantified cost and value benefits.

This structural realignment comes with challenges of its own making; the skills and expertise needed to fulfil the new Board driven remit are different to those that would have been sufficient in the past. Procurement professionals must be, masters of organising and running complex teams, effective members of cross-functional teams and be capable of managing a diverse and complex supplier base. Additionally they are required to prove successful communicators and operators within the highest echelons of modern corporate structures.

For some Procurement specialists these changes have been welcomed with open arms. The new landscape and accompanying demands proved consonant with their personal agendas and have delivered the opportunity to meaningfully deploy a well honed, expansive and flexible skill set. These professionals are now receiving recognition and reward for their ability to deliver real value throughout businesses.

On the other hand, and as is the case in any evolutionary environment, there are those that have found adaption more difficult. Unfortunately we have witnessed the recent rise in the bullying ‘bang the table’ approach to negotiation, and a poor approach (it would be nice to think unknowingly) to supplier relationship management. Demands from Company Boards for greater savings, appears to have exposed incomplete skill sets and a uni-dimensional approach at the Procurement: Supplier interface.

Firstly, it is critical to place the right person in the right role. Supply Chain, Operations Management and Procurement, three burgeoning (and potentially inter-related disciplines), must firstly be able to identify suitably qualified and talented people. From there they need to develop, nurture and retain them. On the way, building effective teams that meet their KPI’s and stick around to receive next year’s targets.

Emphasis needs to shift to seeking out talent that possess the requisite ‘soft’ skills in abundance and has the qualities and aptitude to drive change throughout a business. Today, formal industry qualifications are not enough. The demands on a Procurement specialist go well beyond a remit to negotiate deals and manage budgets and expenditure. The ability to capture the hearts and minds of a wide spectrum of stakeholders within a business plus, of course, suppliers, and enrol them in focussed continual improvement, is one of the key challenges of the modern Procurement age.

Secondly. Organisations are good at giving people the ‘what’ of the role – KPI’s, targets, objectives etc. But it is rare for individuals to be given detailed information on ‘how’ they are expected to deliver – what HR might call the ‘behaviour specification’. Paying scant regard to the ‘how’ can prove costly in both the long and sometimes the short-term.

2009 saw a real drive to realise ‘value’ throughout supply chains. FMCG companies increased procurement teams, invested in external resource and addressed spend areas previously thought of as hallowed ground (HR, Legal, Marketing etc.). The general consensus is that results have been positive – new process, improved pricing, greater value and stronger internal relationships.

However, for those that drove hard bargains, the challenge for 2010 is one of sustainability – managing the new processes and ensuring that the more competitive prices struck mean value not simply cheap.
To this end mutually beneficial partnerships with all suppliers are critical – and the reason why ‘how’ the deal was made (in what atmosphere and by what means) is so important.

Partnership working has never been more critical. Procurement require the help and support of their supplier partners to ensure ongoing delivery of continuous improvement, quality and value, whilst ensuring all parties enjoy viable and profitable businesses.

Those organisations that have recognised the need to broaden their requirements at the recruitment stage, acted upon it, subsequently invested in the right people, and have adopted a long-term perspective allied to a partnership approach have met the criteria for a solid foundation for future success.

What will success look like? A growth in the internal sphere of influence for Procurement - automatic involvement of Procurement teams by internal stakeholders, Procurement central to all supplier negotiations and invitations for Procurement to join cross-functional teams. Allied to collaborative partnerships with suppliers, oriented to share objectives and improving value delivery.

Conversely, those that have been short-termist and forced through quick wins (without the requisite thought as to the impact upon their suppliers), have failed to properly invest in key relationships, and at some future date are likely to pay the price as market improve and suppliers recognise they have a choice of partners.

SRM is the post contract discipline of strategically planning for, and managing, interactions with third party organisations. Best practice models are out there, pockets of excellence exist as evidence that the claims can be met and yet SRM still serves as an after thought rather than an intrinsic part of the procurement life cycle.

The Sourcing journey needs to be considered if we are to understand the finesse required to bring SRM to life. Traditionally a Sourcing function, if in existence, was considered to be a department simply to sign contracts or run a negotiation after a deal has been done. The impact of Sourcing was 'theoretical’ and did not seem to be delivering against it promises. The sourcing activities of Procurement have now become a vital function of successful businesses, it receives more investment than ever before, and as a result it is able to deliver significant benefits when properly executed.

Where Sourcing started is where we find SRM today. Only those organisations that recognise the value of SRM have invested in realigning Procurement and SRM has been adopted as an intrinsic part of the procurement cycle. It is also recognised that the magic elixir required for success lies in the close collaboration of multiple internal business functions. There must be a focus on aligning internal goals and priorities before suppliers are engaged, and indeed throughout a relationship. Approaching suppliers with a ‘single voice’ based on internal clarity and agreement on what value really means will lead supplier relationships to joint successes.

A harsh but relevant realisation is that it is the approach and not the tools that need to be addressed.

So, how do we bring SRM to life? To quote Vanilla Ice is relevant at this juncture, “Stop, Collaborate, and Listen”, this might appear flippant but there certainly is a truth in there that has seen Procurement rise to excellence, and is even more relevant to the journey of SRM. Without doubt there are many other enablers fundamental to success, but what collaboration brings to the table is the ‘key’ required to unlock its potential.

SRM best practice processes alone won’t deliver the tangible and recognisable value that lurks below the SRM surface. Investment in communication and collaboration underpinned by a collective strategic direction is where SRM will find its excellence. Procurement must be ready to lead the SRM revolution.

More recently, procurement has started questioning this compensation structure, pointing in particular to the salary plus commission structure earned by the supplier reps they sit across the table from in negotiations. Why not incent procurement to save more by giving them a cut of the savings?

We’re all interested in our compensation plans – and in particular, ways to increase them. To get a wider conversation started on the topic, I surveyed procurement professionals, asking them: What is your position on procurement compensation programs and how they motivate individuals while also accomplishing the goals of the organization? The responses I received were varied, as were the comments I was able to collect about how companies handle this situation.

Unsurprisingly, 40% of respondents felt they should receive individual bonuses based on savings. In second place, 31% felt procurement groups should receive bonuses based on savings. And yet, the additional comments posted reflected the many difficulties associated with this type of approach: should the bonus be based on negotiated or realized savings? How would cost avoidance be handled under such a system? How do you separate individual/group results from market dynamics? And of course the big question: how do you ensure quality if you incent procurement on savings?

Putting too much emphasis on savings may limit the value of the products and services being purchased, or worse yet, unintentionally move costs to other parts of the business. So if a bonus based on savings is a perverse incentive, resulting in unintended negative consequences, what steps can we take to improve our compensation?

Any changes made to procurement compensation programs, particularly those we pursue for ourselves, should reflect how much money we are worth and also our vision for the role we want to fill in the organization. If we promote ourselves as so integral to the mission of the company that we should have an executive at the C-level, it is hard to justify compensation based on anything other than overall corporate performance.

There is no question that procurement has the ability to rise above transactional spend management, the kind that is ripe for outsourcing, to create real and lasting value. Many of us also probably deserve a raise for the additional responsibility we have taken on through category management and risk management initiatives. The best approach is going about it the ‘old-fashioned way’: making a case to management that represents our expanded scope of responsibility, newly acquired expertise, and continued education/certification. In that way, the straight salary approach can set us free to pursue value creation, collaboration, and innovation wherever we see them rather than to focus on savings alone as a measure of our performance.

In some cases this requires the highest level of close collaborative business relationships. The success of different organisations working together, at a highly integrated level, doesn’t have a great track record, with up to 70% of relationships hitting significant problems due to cultural clashes and ineffective collaborative behaviour. In the private sector, research has found that joint ventures, strategic alliances and mergers and acquisitions, have a worse track record with over 90% failing to achieve the originally intended added value – with ‘human factors’ being the largest single contribution. Getting procurement and partner selection right for these ‘strategic relationships’ is a major challenge for procurement teams.

In the previous edition of this bulletin (‘Mind Reading Unicorns are Not the Answer’), I presented an approach and case study on how some organisations are aiming to mitigate these risks by evaluating intangible ‘human factors’ that are critical to the success of delivery. However by itself this is not enough and the usual, (and understandable), focus of procurement on evaluating and selecting a partner, fails to appreciate that successful strategic business relationships are about ‘chemistry’ or fit between the partners; and that a sole focus upon the potential partner is like trying to predict the likely success of a marriage by only looking at one of the partners!

The ultimate measure of the added value of the procurement function is the success of the contract. Because of the chemistry factor in strategic relationships, this means that procurement teams should not only have the key role in looking-out and robustly testing the critical human success factors of potential partners, but should consider expanding their role or influence and enable their organisation to look–in to ensure that they are fit and ready to partner effectively and make the chemistry work. This is where the world’s first standard for Collaborative Business Relationships (BS11000) comes in!

The most obvious entry point for the procurement function is the ‘partner selection’ stage which addresses a number of key potential partner evaluation issues. However this is the 4th stage and it cannot be carried out properly unless the earlier stages have been completed and the five stages that follow ‘partner selection’ can only happen post-contract award.

The earlier and latter stages may seem to be out of the scope of the procurement team role, however the earlier stages are prime territory for establishing requirements and influencing the organisation to consider its readiness plan for partnering, whilst the latter stages provide a framework for developing contractual expectations for the relationship in the future. By paying attention to the earlier and later stages too, the procurement team can make a stronger positive contribution to delivery success by addressing the ‘chemistry’ factor.

The term partnering has been overused and abused. Stage 1 ‘Awareness’ provides a framework for establishing the true requirement, and the procurement function can enable the organisation to clearly determine what level of collaborative relationship is required by looking at the complexity of the project, the level of inter-dependence needed between the ‘partners’ and other factors such as risk. Although some may argue that this is out of the scope of the procurement function, this is the stage where the procurement team can provide leadership and influence in encouraging the organisation to consider the essential initial question.

If the need for collaboration has been established in Stage 1, and management commitment to it has been secured, the ‘knowledge’ stage provides a framework for the procurement team to test the specific opportunities in the market place and testing the reactions of key stakeholders such as customers and supply-chain to the proposed collaborative venture.

This stage asks the question ‘’how fit are we to collaborate and play our part in the ‘chemistry’ and what do we need to do to ensure we play our part? If the future collaboration does really demand inter-dependence between the partners, this is a key stage. It may be beyond the scope of the formal role of the procurement team but their influence in promoting this will increase the chances of a successful outcome. If Stage 1 was handled well, the necessary strategic management backing and support will also be in place.

Identifying, evaluating and selecting the partner are tasks firmly within procurement team territory. Here the Standard challenges procurement teams to examine the fitness for purpose of its approach to these tasks, and provides frameworks suited to the unique challenges in partner selection. Many procurement approaches for collaborative partners remain essentially unaltered from traditional trading and contracting paradigms and it is important to ensure that evaluation methods match the requirement. The Standard provides frameworks for developing relevant assessment criteria and proposes evaluation methods better suited to the task than traditional approaches. Importantly, the guidance acknowledges the ‘chemistry’ issue and chief amongst its recommendation is future proofing the relationship through the use of scenario-based evaluation involving both your organisation and that of the potential partner.

If the previous stages are necessary building blocks, to mix metaphors, these stages are the work horses for delivering the intended value of the collaboration and include putting in place the people competences, processes and structures to obtain maximum value from the relationship and to ensure, through measurement and improvement of collaborative behaviour and trust, that the relationship continuously improves its value. These stages all occur after contract award. So how can procurement play a key role in making these stages successful?

In our experience, getting commitments from potential partners to put these steps into place post award rarely gets the detailed attention that the ‘core’ requirements receive in the setting of tender requirements phase. The same can be true in the tender evaluation phase where these factors are either insufficiently evaluated or given scant award score value or both! How much value is given to this requirement is a decision which will fall out of the earlier stages. Defining the parameters for tender responses, and evaluating them robustly, can be improved significantly if the BS11000 standard framework is applied.

The final stage is the ‘Exit Strategy’. It is anticipated from the start of the process that an exit strategy will be developed and continually refined during the life of the relationship to ensure that in all eventualities the interests of the partners are secured and bettered as a consequence of the collaborative relationship and that disengagement is a planned event to ensure, amongst other things, that business continuity is maintained afterwards. Dependent upon the type of contract or service, this part of the framework may be relevant for procurement teams to consider in the requirements – setting phase.

The B2B team are currently working with public authority organisations in helping them to integrate the relevant features of BS11000 in their procurement processes for obtaining a strategic partner.

Based upon the Standard, the team have developed an organisational readiness health check to help organisations determine the actions that may need to take, and the areas they may need to develop if they are to undertake a procurement of a strategic partner successfully and go into the relationship in a fit state. B2B are happy to trial the health check on a free of charge basis with a small number of organisations. Contact me at B2Bppm for more information.

In the product development arena, the collaboration between engineering and procurement teams becomes even more critical. The designs are in constant flux and when an engineer has a breakthrough, he needs the product in hand almost immediately to ensure timely delivery to the customer. In this environment, cutting sourcing teams out of the loop early actually slows down the process. Sourcing has the resources, contacts and experience to follow up with suppliers to ensure timely return of the quote as well as to negotiate cost and delivery. Rather than “standing in the way of the engineers” due to budget constraints, sourcing and engineering must work together to design a product that meets all the customer’s requirements, including budgetary constraints.

Engineers may believe that sourcing professionals do not possess the technical understanding to speak with suppliers and get the answers they need. And, for a strictly technical conversation in which the engineer is trying to figure out exactly what will work in the design, sourcing need not be directly involved. However, if during the course of that conversation, the engineer discovers that the supplier has a solution he/she believes will work, sourcing should be informed and copied on any email correspondence moving forward. While most sourcing professionals are not engineers, they typically have enough knowledge to understand the basics. Collaborating in this way will ensure prompt, quoting, ordering, and delivery as well as appropriate costing of the product.

By working collaboratively, engineering can focus on the design and solvie customer issues, while sourcing can take care of all the commercial aspects of dealing with the supplier. When each group focuses its resources on their areas of strength, the customer wins with a great design that is within budget for materials and labor; the engineers and sourcing professionals win by spending their time and efforts on the projects and tasks they enjoy and by feeling satisfaction that they’re presenting a winning project to the customer.

In the 1980’s, we input data into computers to enable companies to network information between departments. The 1990’s let us download that information from the Internet. In the 2000’s we could upload our very lives to the Internet and show the world our individuality in intimate detail. The Upload Generation had arrived. With that comes a more intense global competitiveness that appears to struggle on planet Earth while something else tries to champion it in a virtual world.

Email, websites, Face-book et al......................................and what else? And how does it hit our working lives? OK, let’s put that into the business context. Procurement Professionals, for example, deal with that change every day. By being involved in the process of supply and demand, they understand that ideas are the only response to such a fast changing climate. Innovation puts the product out and the profit comes in.

The creativity needed to manage this process is a critical success factor in jobs when the world changes so fast. How do we manage it in, for example, Procurement as a profession? Maybe we should turn to the life and times of artists and musicians for our answer to creativity, but then why don’t we just follow some simple rules.

Key to success today is getting products to markets faster than the competition. Key to that is the innovation process. Idea; concept; design and development and before you know it the latest whizz bang product is on your dining room table or printed on your eye catching jeans. The Procurement process hugs the business model from start to finish. To be sustainable, contact is key to success:

· Contact: Without it the teams that drive success would falter and that prize winning idea would end up in the welcoming arms of the competition.

· First contact: Let’s all get involved at the concept stage so that we have an understanding of what the company needs.

· Close contact: What’s the point of staying in touch if you can’t influence?

In this, it’s worth reminding ourselves that all companies fail due to bad management, and that all management fails due to bad communication and that communication fails because no one stays in contact. To be successful as a Procurement Professional three skills are critical:

· Ideas: try to think of new ways of contracting that will bind parties in a tighter relationship.

· Awareness: know the market and the business climate.

· I will: It’s OK to have the skill, but without the will nothing will happen – including your career. Target goals with ideas.

Procurement success in a global economy comes from contact with ideas, markets and people.