Epic Purchasing Battles – Business Vs. Procurement


Purchasing Woes

I must be getting old.  Or maybe I’ve been in the Pharma-Biotech Industry for too long.  Maybe it’s the life of working in a support function. No matter the cause, there has to be an explanation for this.

Otherwise, I’d have to believe that people may be trying to sink their own ship. Which doesn’t make a lot of sense to me.

And yet it keeps happening! It doesn’t matter where you work. Or even who your business partners are. The sentiment of purchasing or budgeting in a corporate world tends to be the same.

It’s not MY money when I’m spending it like a drug king pin; but, it is MY money when budget cuts come around.  And you can’t take it!

Kind of reminds me of a clip…

Purchasing Policies and Processes? Never heard of them.

I’m sure you all realize by now that FP&A (Financial Planning and Analysis) and Sourcing/Procurement functions just like to poke at the business. I mean, why else would we have a purchasing policy? Or even a purchasing process?

They are both useless really.  And that’s why so many people just skip them. They just know better.

Purchasing Decisions and Decision Makers

Let’s for a moment exclude all the companies that actually have and enforce purchasing policies. And let’s focus on less mature companies. Because this is typically where the problem lies. Small or innovative businesses, don’t want to hinder purchasing for fear of slowing down the pace of growth.

So for any purchasing decision-maker in this position, it’s the wild wild west. Find it. Buy it. Don’t worry about the price. Or quality standards. Or risky suppliers. Or anything that can slow down the process of buying something. Those things just tend to get in the way.

Purchasing Regret

What if I were to tell you that three other people at your company just bought the same data, from the same exact company? How about if you paid more?

How would you feel if you knew a certain company that messes up every order for you, and hasn’t had one problem with others in a different department? AND they are giving them the newest and innovative products that you don’t have access to.

Would it change your mind if I told you the supplier who has worked for you for the past 10 years, that you look every day in the face.. is billing for extra hours (not actually worked)? Are you angry yet?

What if I told you that if a new supplier missed a timeline, you could get a percentage of the total price? Would you have any purchasing regret then?

The sad part is, that purchasing functions continue to see this happen day after day. And no matter what they do to combat it, it still happens again.

Finance Functions

Since these aren’t new problems to procurement, guess what – we actually have solutions for them! We aren’t just a one-trick pony focused on price.  We provide other valuable services that can help you with supplier relationship management and contracting.

But that’s only if you let us.

So the next time you are thinking about circumventing the policy or process, stop for a minute.  Consider some of the nasty alternatives you can have when forgetting to include those only trying to help you.

I promise you the savings don’t go to my bonus (and never will!).  And I also promise you won’t have the purchasing regret from waiting two weeks and finding out the company is about to go belly-up in a month or two.

“A budget tells us what we can’t afford, but it doesn’t keep us from buying it.” – William Feather


Reimagining Procurement for the Next Normal
Epic Purchasing Battles - Business Vs. Procurement 1

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