×
NewsDay

AMH is an independent media house free from political ties or outside influence. We have four newspapers: The Zimbabwe Independent, a business weekly published every Friday, The Standard, a weekly published every Sunday, and Southern and NewsDay, our daily newspapers. Each has an online edition.

Buyers — aim to make a difference in 2013

Opinion & Analysis
Using a football team as an example of an organisation, the procurement function will be viewed as the midfield department.

Using a football team as an example of an organisation, the procurement function will be viewed as the midfield department.

Opinion by Nyasha Chizu

A team may have good strikers who can score goals and good defenders who can tackle opponents. The two departments will not be effective no matter how good they are if they have a weak midfield department. To support what I am trying to put across, Spain won the World Cup in 2010 with a team composed mostly of attacking midfielders.

The finance function is normally the “defending and keeper” one; marketing and operations play striker roles. Successful teams have been built around good midfield departments and as such, procurement professionals need to pull up their socks to drive the organisation’s engine of competitiveness. Competitiveness is derived from good sourcing techniques.

The backbone of sourcing is a proper understanding of organisational requirements. Success in procurement is based on a buyer’s understanding of the organisation’s operations. Such knowledge is not available in any procurement textbook, but through a thorough study of the organisation’s operations. A procurement professional must understand engineering language if the organisation is engineering, farming — if into farming — mining if into mining, etc. A good procurement practitioner is a buyer by qualification and engineer, accountant, quantity surveyor, quality controller etc by association.

Understanding organisational operations enables the buyer to understand production and operational needs. One can effectively catagorise organisational needs and invite suppliers to partner the organisation in business through the formation of an approved list of suppliers. An approved list is not the end of the process but a means to select preferred suppliers for critical supplies. Procurement personnel must aim to develop preferred suppliers for their organisation in 2013. The process does not involve gut feeling or shooting from the hip, it is a technical process that requires proper planning and execution.

Aim to develop suppliers in 2013. Development of suppliers does not mean favouring one supplier, but collaborating with your critical suppliers to improve and support their efforts of meeting your organisational needs. There is a lot that is involved and I encourage buyers to further explore this subject for the benefit of their organisations. Say no to maverick buying in 2013. Prepare a procurement budget in consultation with all stakeholders in the organisation. Be ahead all the time, entering into long-term supply arrangements for critical goods and services for your organisation.

This will inevitably afford your organisation good quality and prices to outperform your competition. Take note of the fact that reduction of input costs by only 5% has an up to 20% positive effect on organisational profitability.

Report your achievements objectively to your superiors. A monthly procurement report must provide management with the performance of your unit in relation to procurement role in cashflow management. Contributions made to relieve the organisational working capital while sustaining or improving the organisations’ operations need to be recorded and quantified.

The 2013 procurement reports must reflect budget savings the procurement function has achieved for the organisation. Such type of reports must not be limited to expression in financial terms alone. Report in terms of how well you are managing suppliers. Management need to know the percentage of on time deliveries, percentage of goods and services delivered in the right quality, etc. This type of reporting can then be given a monetary value at the end and management can easily notice the role of procurement to the organisation’s competitiveness.

Make 2013 the year decision makers would realise the role of procurement in business. It is only you who will make the difference regardless of the sector you are serving.

  • Nyasha Chizu is a fellow of the Chartered Institute of Purchasing and Supply writing in his personal capacity. Feedback: [email protected]