Strategic Procurement

Doesn't Mean Being In The Supplier's Bag For A Long Time!

BY Osama El-Kadi 2007

"Buyers in the Suppliers Bag"

In the supplier Bag

Talking about "Strategic" Procurement and what this means is more confusing than ever.

Attaching the word “strategic” to any endeavour in life for that matter seems to be surrounded by even more confusion.

At best the word strategic gives the feeling of something is going to be expensive or that the person talking about it is an important person.

At worst the word could suggest doing something for a long term or having a very long term relationship with the supplier.

Let’s try to clarify.

Adding the word “strategic” to any function or activity must surly mean that we are thinking about this subject with a “whole Brain” mentality as oppose to “right Brain” tactical mentality.

To go a bit deeper, a Whole Brain approach or strategic approach is essentially an Introspection process going inside our heads to analyse the consequence of our action, And see the outcome objectively before the action takes place.

On the other hand, the Right Brain approach or the tactical approach is a sub-conscious driven or a spontaneous reaction devoid of any real introspection or analysis before an action is taken.

We just sometimes confuse thinking with whole brain activities, where thinking itself has been proved to be conducted unconsciously.

Enough of this mumbo jumbo philosophy and let me give you an example about what is not a strategic procurement.

A “smart” buyer (and this is real by the way), fan of cheap sourcing made a “fantastic deal” buying a large quantities of batteries at an incredible price for his company to sell.

He bought a four years supply at a 70% discount. What this “smart” buyer didn’t introspect upon was the shelf life of the batteries, was only two years. What a deal you may say.

A “whole brain” or a strategic approach to this simple deal making would go about this in an entirely different way.

Any analysis and "introspection" before hand would clearly identify the issues and lead the buyer instead of getting excited about the great discount he was given to making a Long term Frame work Agreement with the supplier.

This strategic contract will guarantee the price, the discount, continuity of supply and the freshness of the product at all times.

It is important to mention that “thinking” or unconsciously acting is not a bad thing, because if you do a “strategic” road crossing you will certainly be hit by a car before you finish your analysis.

It is just important to point out that when we say strategic procurement, strategic negotiation or strategic anything, that our tactics and actions in any situation are guided by an overall objectives, mission or a grand strategy and that we introspect rather than simply react before plunging into action.

I will leave you with this great quote:

"Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat."
Sun Tzu the Art of War.

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