E-Sourcing Forum » Unmuzzling Procurement: Supply Chain Success Can Be A Marketing Slam Dunk

Unmuzzling Procurement: Supply Chain Success Can Be A Marketing Slam Dunk

October 13th, 2008 at 08:19am Charles Dominick, SPSM - Next Level Purchasing

In my years in the field, I’ve seen many procurement professionals be approached by media, such as trade publications, with the opportunity to share their success stories with the press only to have the idea shot down by their organizations’ Communications or Marketing Departments. I can’t say why this is in all cases but, in many instances, Marketing/Communications wants to keep tight control over the messages sent about their organizations.

What do I think of this?

I think that these organizations are missing out on a great opportunity.

Why?

Well, consider those organizations’ prospective customers. Those customers – like any smart buying organizations – want a favorable cost structure as part of their deals.
Knowing that a prospective supplier has a high-performing procurement team can give the customer some level of comfort that costs will be kept under control during their relationship. They don’t want to select a supplier that, during the course of the relationship, will approach them to renegotiate pricing because they were inept at controlling their own costs or correcting their inefficiencies.

A successful procurement department is a great selling point. Marketing and Communications departments should use that to their advantage and actually seek out press opportunities for their procurement teams.

It’s a competitive advantage waiting to be exploited.

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Entry Filed under: General

5 Comments Add your own

1. Tim Cummins | October 14th, 2008 at 6:03 am

The point you make is interesting and sometimes valid. However, as a negotiator from the other side of the fence (sales contracts), let me tell you why companies are sometimes hesitant to boast about procurement success.

If I highlight the quality of the procurement group’s efforts – at driving lower prices, or generating superior reliability, or cutting lead times – then you are right that customers value this. So of course the immediate question (from one of those talented procurement professionals sitting opposite me) will be “So where are those benefits reflected in your contract?” They immediately turn my achievements around on me to look for ’superior’ terms and conditions or lower prices.

Now that is fine if I can indeed demonstrate that I do offer better terms – shorter lead times, higher damages for failure, lower cost of ownership, superior guarantees or service levels. But few Sales organizations have this level of competitive intelligence – we rarely know in detail what competition is offering or what they may be desperate enough to match.

Second, in today’s inter-connected world, many of my major customers are also my major suppliers. It is not always smart PR to suggest that I am somehow screwing my customers – yet that is the way that Procurement success stories will often be read.

So Marketing and Communications have a tricky balance to perform here, but in my experience trumpeting Procurement’s achievements often results in unintended -andadverse – consequences.
2. Anonymous | October 14th, 2008 at 12:23 pm

If you really dig, there are some great user-based case studies available, but it requires some real teancity on the part of the trade journalists involved. Is there a better strategic sourcing case study listing out there than this one right now?
http://www.purchasing.com/article/CA6345745.html
3. Anonymous | October 14th, 2008 at 12:28 pm

PS–The low-level content aggregators and bloggers that are only out try to skim some traffic or money off of the content being produced by the few tenacious trade journalists left in the market only serves to put the trade press in greater jeopardy than it already is. Is that what’s best for any trade? Something to keep in mind as you all pursue your own content strategies.
4. Anonymous2 | October 14th, 2008 at 1:39 pm

Tim – the points you make are interesting and sometimes valid.

You said: ” Now that is fine if I can indeed demonstrate that I do offer better terms – shorter lead times, higher damages for failure, lower cost of ownership, superior guarantees or service levels. But few Sales organizations have this level of competitive intelligence – we rarely know in detail what competition is offering or what they may be desperate enough to match.”

That sounds like a problem with the Sales organization, not a problem with Procurement. Smart procurement should make an organization more competitive in ways that are easily measured and communicated. Your comment also implies that procurement professionals will not negotiate or challenge the supplier to put forth the most competitive proposal if they never heard of their counterpart’s procurement success story.

You also said: “It is not always smart PR to suggest that I am somehow screwing my customers – yet that is the way that Procurement success stories will often be read.”

This implies that smart procurement = screwing suppliers. There are several examples in the above-linked case study list where win-win relationships were the basis of success.

That’s not to say that an organization shouldn’t be careful when deciding to share a procurement success story. But to write off the notion entirely because of perhaps a few poorly executed PR opportunities isn’t necessarily a better strategy either.
5. David Schneider | October 16th, 2008 at 11:17 am

One reason that corporate communication departments put the clamps on the “interviews” and article publication is the rules that public companies have to live by with SarBox and FD. Under FD (Full Disclosure) any messages about process that contain any numbers at all will come under the “red pen” because the numbers have to be approved by the CFO/CEO.

For those folks concerned about how the tables could be turned at the sell side, a well written piece that focuses on the the development of a relation that was a mutually beneficial solution will be a liability only if the sales organization of the subject company is not authentic to the practice of the procurement side of the house. If your sales force owns a “Win – Loose” attitude then an article based on how the procurement folks are “Win-Win”.

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