Partner Article

Why does procurement still work in the dark?

I thought the days of procurement being part of a business that was only wheeled out of its dark, money-saving cupboard when a new set of boilers were required was long gone, but apparently not…

The role of the procurement team has, for as long as I can remember, been based on process management, negotiation and numerical analysis. Yet procurement is about so much more than buying products, materials or services at the lowest possible cost. Unfortunately however, it seems some organisations still haven’t realised the impact effective procurement can have on their business

Involvement in everyday business activities allows the procurement team to showcase their commercial skills, far beyond just running a tender and saving the business money in the short-term

Procurement should always be fully involved in the operational and strategic decision making process within an organisation to ensure full awareness of the organisational requirements.

If as a landlord you were looking to get a set of new boilers for a number of your homes, why would you just look at the upfront cost and pick the lowest? Yes that might save you money in the here and now, but what happens if the bracket you have in your homes don’t fit that particular boiler and you then need to buy new brackets to support them? Or what if the boilers don’t come with a manufacturer’s guarantee and a year down the line, you need to spend money repairing them? Or what if their lifecycle is a maximum of five years but you need them to last for ten? Effective procurement is about assessing the full package with whole-life costs rightly becoming the firm driver of professional procurement. This includes looking at things like quality, price, after sales service, running costs, contract delivery, life cycle and maintenance costs so that you make the most efficient decision.

Hopefully one day we will get to a point where you can walk into any senior meeting in any organisation around the world and see procurement at the table helping to make key business decisions like this…

As chief executive of a leading procurement organisation, I see every day the impact effective procurement can have on a business. We work with a number of social housing landlords in the North East where we purchase everything from roofs and windows to boilers, repairs and everything you need to maintain an existing or to build a new home. In my experience, procurement can only help an organisation save money and become more efficient, with the benefits becoming even more apparent since the introduction of the Government’s one per cent rent reduction. We just need to be let out of our cupboard to show you what we can do…

To find out more about NE Procurement, visit neprocurement.org.uk or email info@neprocurement.com.

This was posted in Bdaily's Members' News section by Prosper .