"Understanding Procurement"

Introduction

Initially, I did not set out to author a book about procurement. I wanted to start a Procurement Consulting company. After 30 years in the profession, I realized I had amassed much knowledge. Then, someone sent me a book on self-publishing (I wonder why or who), which started me on this path.

My target audience for this project is procurement folks, senior management, those aspiring to get into the profession, and those simply curious about what we do. This volume has a lot of information for all but want target, more specifically:

Newbies: These are folks who are new to the profession. This can give them a clue as to what they might expect in the future and if it is the right path for them should they choose to pursue it.

Purchasing Department Personnel: Procurement and supply chain is much more than acquiring goods and services. If you are a buyer, this will give you an idea of what is next in your career progression should you choose to stay here.

Senior Management (outside of the department): Often, upper-level management may not know, or even care, about the inner workings of an effective procurement department. This will help them understand what we do and our daily challenges.

Senior Management (within procurement): The initial draft of this book covered less ground than it does now. However, the more I kept writing, the more I could recollect what I had done throughout my career.  For instance, what is considered an effective supplier onboarding process? Is your AVL too big to be expertly managed? Do you have a DVL? Senior procurement management knows all this stuff, and this book is just a place that puts it all together. For them, this might be a good reference source.

Anyone just curious about what we do: This book is also for anyone else (folks inside or outside the company, suppliers, or people curious about how procurement can be done and interacts with other departments). Indeed, it is not on everyone’s “to-do” list, but some people may be curious about what their brother-in-law or sister does for a living.

I read a book about starting a consulting practice in which the author indicated that if someone writes and publishes a book, it makes them an SME (Subject Matter Expert). Whether or not that is true remains to be seen, and I will leave that for you to decide! For many years, I have worked in various supply chain positions in multiple companies, industries, and philosophies. I have collected much of this information and decided to put it on paper and organize it.

In doing some additional research, I found out that there are few consulting companies out there that focus solely on procurement and supply chain management. Several large consulting companies can do procurement, but they focus on something other than the subject, usually with large clients.

I wanted to put something easy to comprehend and simplify the concepts for procurement and non-procurement professionals to understand. So often, when people asked me what I did for a living, and I answered that I was in procurement, I would be met with confusing looks. Many would ask me to explain myself, and I replied, “I buy stuff.” They would nod and walk away. I would then find myself explaining that large and small companies must buy goods and services like everyone else. I then tell them I am responsible for negotiating contracts and issuing purchase orders, and they begin to understand the field! My intent here is NOT to turn the profession on its end but to explain, in simple terms and plain English, the difference, for example, between an RFI and a QBR. These are terms that we will go over soon enough! It may sound like technobabble, but every profession has its version of alphabet soup, of which procurement is no different; it will make sense.

I will also review some concepts I have learned that you can apply to your business or department. That is where the consulting part comes in. Although you can use some ideas, every situation is different and must be adapted accordingly. Furthermore, you can apply some of these concepts to your life events, such as purchasing a new car. Much of this depends on how much time you must dedicate and how far you are willing to go. I am eager to go far! I once drove to two states (from TX to MO) to save $1,000 on a motorcycle and went from TX to NJ to get not one but two cars! Do you have that kind of determination?

I was once accused (by a supplier, no less!) of negotiating like a used car salesperson. Instead of being offended, I considered that a compliment and a badge of honor! I got a better price! So, call it what you will!

PS: This aspect has driven my lovely wife crazy over the years!

First, I'd like to tell you what this book is and what it sets out to do. This book summarizes different things we do in procurement day in and day out. As I considered organizing it, I discovered many more areas I wanted to explore.  It gives the reader an idea of the ground we cover as professionals and our responsibilities. It is far more than just "buying stuff"! I shared the knowledge I have accumulated over the years non-technically. I wanted to provide a flavor of situations that I encountered. Not everything happens daily, but over a few years, you will experience many, if not all, of the things I describe.

Now, I would like to tell you what this book is not. It is not a complete encyclopedia or definitive textbook on the subject. I have touched upon various subjects and given the reader an overall understanding. I have not gone into great detail on many of them by design as I wanted to keep the non-procurement readers still interested! I hope I succeeded in doing some of that! There is much more on each subject that can and has been written.

In this book, I will sprinkle in "Real World Examples."  These are actual experiences that I have encountered, and I use them to explain further a concept with the application of what occurred. You will also find that ethics are critical to me. Procurement personnel are in a unique position in that we typically represent the company to the supplier community and are on the front line. Suppliers occasionally push you to see if they can acquire at least a piece of the business (or a larger piece!) in ways that are not always above board and sometimes below board!  

I hope you enjoy this book and that it raises some thoughts that make you say, "Aha," or "I never thought it that way."  The ultimate objective is that you learn something. So, without further delay, let us go!