
During a weekly huddle this week, an interesting
conversation broke out. As we discussed a set of logistics projects we’re
currently supporting for our client, a colleague said: “You know this client had tried doing this twice before and failed?...
this time they are moving forward and you know what the only difference is
between the last two years and this year? That we were involved. Period.” He
was absolutely right, the project itself wasn’t substantially different and the
only significant variant was our participation.
As much as I’d like to think that our winning personalities
were the catalysts for this project’s success, the conclusion I ultimately
reached was that the reason we enabled success for this project was the fact
that “we spoke the language.” By that I mean we were able to translate the
needs of business into procurement terms and provide a procurement-minded
perspective back to the business.
See, this isn’t an easy thing to do and – frankly, it’s a harder thing to sell. But it’s true. When you look inside an organization you will quickly realize that each and every functional area of the business operates and performs at a certain level of sophistication; in our situation, when procurement departments communicate to the business in procurement terms, the business my disengage quickly. They might perceive that not only is procurement solely looking for “savings” and not attending to the deeper needs of the business, but, more importantly, that procurement is simply not savvy enough to understand the business and serve its needs.
A sophisticated procurement unit will be able to understand
how each operational area quantifies and captures value and communicate
accordingly. In the case of logistics categories, what procurement folks would
typically consider “savings” may be very different from the way transportation
people see or capture them. In fact, there is such a thing as “too much
savings” in logistics, and it’s not a thing anyone would like to see. But we’ll
talk about that on an upcoming blog…
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