SPEAKING THE LANGUAGE OF PROCUREMENT – MINI SERIES
Something we get asked to do a lot when we’re delivering our Procurement and Supply Chain courses and Consultancy Services is to draw upon real life examples to explain what we mean and decode the jargon, luckily our team have a wealth of skill and experience with-in the Procurement industry and can do this with ease. We like to call it “Speaking The Language of Procurement”.
With this in mind, we thought we’d create a series of mini blogs to explain the procurement process further. If you work within a business with responsibility for supplier spend and operating costs then this is for you, similarly, if you sell to procurement and want more sales then you need to understand how procurement work, think and operate.
When we communicate in a business environment we must consider how our language might be perceived by others. Use of humour for example can engage people alternatively it can come across as flippant and might not be taken seriously.
Gerald Ratner famously destroyed his multi-million jewellery company in ten seconds with a flippant comment. "How can I sell my jewellery for such low prices. I say it's because it's total crap " minding our language is critical.
A number of terms exist for this critical function
· Procurement – Strategic
· Purchasing – Operational
· Buying – Tactical
· Supply Chain - Big (business) picture
Over time the buyers language has evolved as they shift to procurement
They have collected acronyms and jargon that defines them and allows them to be seen as credible and important
To elevate procurement from buying we use terms such as
· Cost out -value in
· Spend and category management
· Key performance indicators
· Supplier relationship management
· Continuous improvement -Kaisan
· Lean and just in Time
Let’s understand these terms further during this mini blog series and break down the language of procurement. Over the coming weeks we will discussing these 6 steps
· Step one: Categorisation of business costs
· Step two: Stakeholder consultation
· Step three: Strategic sourcing of business requirements
· Step four: Negotiating cost out and value in
· Step five: Contracting for success
· Step six: Continuous improvement through supplier relationship management
Tune in next week to read more about Step one, Categorisation of business costs.