A Rock and a Hard Place

Most Procurement Heroes I know want to do the right thing. They are good, hardworking, respectable folks who keep the good of the organization in mind.

“Reduce the number of suppliers in the contracts database!” we hear from our management team and a chorus of “yes boss!” is issued. We run off, we assess, we evaluate, we hire consultants, we clean up, whittle down, get lean.

Beaming with pride, we present it to our mangers who then say, “We need to use more small and medium size suppliers! Especially the local ones! Our numbers are terrible!”

“Yes boss” we cry and run out to find small and medium AND local business. We add all of these new specialty finds to the supplier database and the numbers in the supplier database creep up.

And then the circle begins again.

I’d never really thought about it as a rock and a hard place situation, but the article in SupplyManagement.com titled Procurement in SME catch-22 really got me thinking.

“…the requirements of corporate social responsibility are encouraging buyers to use local, small firms in their supplier mix. But herein lies a paradox. Procurement teams are also striving to slash their supplier base, hoping to push costs down by buying in greater volume from fewer vendors. By definition, SMEs could struggle to fulfil (sic) such orders.”

So what’s a confused procurement professional to do?

“…reducing numbers is not the only objective…(instead) working with the best suppliers in each of our categories, be they small or large.”

And that’s the answer. It’s not looking for broad range “we can do it all” or smaller “you fit the diversity numbers”, but finding the right suppliers, nurturing them, and developing the relationship.

That’s how you achieve both goals.

And as usual, with many of the posts on this blog, what I suggest is the road less traveled. It takes time. Takes effort, diligence, educating your management team and also takes your best buyer away from other work.

But the investment pays off…and keeps you from getting stuck in that rock and a hard place.

Photo from _molly_ ‘s Flickr photostream