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Procurement function is one of the core areas in any corporate structure. However, those actively involved in this consider Procurement as a thankless activity. When anything goes wrong or project deadlines are not met, the whole blame finally falls on Procurement functionaries. The are the most favorite scapegoats. Do you agree to this ?
I've seen that happening a lot of times during my career, therefore I totally agree that purchasing and Supply Chain in general IS the scapegoat for almost everything going wrong in an organization.
There is only way to avoid such a blaming.
Detailed and proper standard operation procedures.
SOPs may cause a bit of delays in day-to-day operations but safeguards that the job is done with a certain way, commonly accepted within an organization and issues specific responsibilities and liabilities to specific departments and individuals. This means that if and when a chain breaks, you can trace back to find the broken ring, which usually is not one of the purchasing or SC pros.
It would also be useful, to analyse WHY is the purchasing and SC to be blamed for any lack.
Purchasing and SC in general, doesn't make any profit for an organization. Savings is not considered as a profit for any organization but only a given duty that purchasing and SC MUST do. Therefore SC is the one to do the dirty job for everyone, never to expect congrats and always to be blamed for any lack of any department of an organization.
The only way to "defend" yourself is to hang in SOP
Procurement plays a vital part in wholesale as well as retail based companies so I can see that happening.
Yes in some situations.
I worked in UK public sector procurement for some years. Many people there associated procurement with delays.
There are regulations in the UK and EU which must be followed by law including publishing all the documents at the start of the project and giving suppliers a number of weeks to respond. If a project team do not approach procurement at the beginning they may not factor in the timescales and then unfairly associate procurement with delay.
In the private sector procurement professionals do not have to follow the regulations so there is no need for delay. I found a bigger problem in the private sector is that project teams can often expect procurement to describe the requirements (write the Specification). The experts need to write the Specification. If procurement write it they may miss something that the business needs as they are not the ones managing the contract on a daily basis.
Just let them try to claim such,..;)
Yes I agree that during project failure or not meeting deadline, there is always blame game to Procurement but I feel that if your SOPs / internal controls are strong and you have a good system for your procurement management especially a proper monitoring and follow-up of your procurement activity from receiving of purchase request form till delivery of goods/services then you have exact proper response for any blame game. As procurement is a middleman between supplier to ultimate beneficiaries so always affected due to third party. If you have a strong contract clauses and their implementation especially penalty clauses for late delivery and quality assurance check system then obviously no one can blame procurement. Procurement have to manage for being scapegoat.
I have seen Purchasing being blamed on delays, however my production never had to suffer or stand still.
You can not do anything about a vendor giving you false information ...yes you get yelled at for it .. and production is happy when it is confirmed that this been a mistake after the owner got involved.
NO you can not do anything when there is an act of God ... a facility had flooded and your emergency order still had been scheduled in time, but your floor manager wants it a day earlier in than possible, just to have it on site...
No you can not do anything about if an order is sitting in a Port that strikes and your bosses container is not there in time and he is on a business trip..... only thing you can do is to set haven and earth in motion to find a replacement for this commodity (lead time of8 weeks and needed in hours)... money is at this point not an issue to make sure production gets what it needs to continue producing to fill our orders........ at this point the entire plant knows who saved the day......
So Purchasing is not always the bad guy, but you also got to fly at times of the seat of your pants.. have a feel what is need and not only relay on a computer to tell you when to order.
Procurement guidelines are based on economy, efficiency, transparency and fairness. Now, to maintain these guidelines, the procurement professionals have to abide by the set rules.
The main reasons for delays in procurement projects are:
1. In public sector donor funded projects, specifications/requirement does not come clearly to the procurement department. So, procurement professionals have to go back and forth to make it correct.
2. Secondly, the delay in award of contract due to bureaucratic processes with several approvals from committees as well as donor agencies.
3. Finally, in case of turnkey projects, the installation site is not ready which in fact would have been the responsibility of users. In order to settle the deal, procurement has to go for site preparation, electrical wiring, plumbing etc. as per requirement.
So, when procurement finally gets the job done, it is delayed and missed the deadline.
In case of private sector projects, the situation is a bit better. Still, procurement professionals do not get clear specifications based on necessity and have get it corrected through their own effort. Of course, there is no bureaucratic delay in approval. Delay in site preparation is also manageable.
I agree that sometimes procurement professional are blamed for delay, but still I would favor let the procurement professional get the specifications corrected and put the equipment or works in final use to ensure desired project output. It may be delayed by few months but better than failure.
I am very Close to Oliver's answer.
Project managers are regularly blamed for schedule delays and cost overruns for projects they inherit by no fault of there own, however, in most cases, the fault for such issues rarely lies with just one person.
Yes I agree and this happens a number of times.
But there is a smart way of avoiding it, At the start of any project prepare a Procurement plan.
This plan has to worked out in the reverse order of dates, starting from when the part is required for use at project site.
1) Part required for project site
2) What is the tranport time from probable supplier to Site
3) Time take for developing the part
4) time taken for RFQ process, negotiation and completing contract formalities with supplier
5) time taken by the R&D designers to design the part/ make Statement of requirement.
Assign each task a timeline and date and start monitoring the progress, with this way you can immediatly make out which activities/ business function has taken more than the normal time and has defaulted.
Also start wit a buffer in hand so that even if the part delivery is delayed it does not affect your project.
Meet with the project team daily/ weekly to assess the progress of the project before the procurement activity.
This way you can acutally help the project delivery before time and can adress any show stopper issues quicky.
Agreed that purchasing and Supply Chain in general is the scapegoat for almost everything going wrong in an project failures.
How to avoid this issue :
1. Detailed and proper standard operation procedures.
Purchasing job should proceed with a certain way, commonly accepted within organization and issues specific responsibilities and liabilities to specific departments and individuals.
2. Detailed project schedule.
Schedule should detailing and well-informed to every specific department and individual involve.
