1: Introduction
I took on the challenge of writing a condensed version of all the current Procurement challenges. Basing this on the many articles I have read covering this subject. I rapidly came to the conclusion that these articles were excellent at the helicopter view of the challenges, however seemed unable to apply categorisation to the challenges.
I believe the issue with these articles is the broad range encompassed by the word Procurement and the constant change within this domain. To my mind, your challenges depend on where you are in transformational change within your organisation, the scope of your function within Procurement and the nature of the organisation’s supply chain.
For example, is your focus on strategic long-term supply relationships to support your manufactured product? Or are you perhaps focused on the supply of marketing branded goods?
These two procurement domains have distinctly different challenges. Yes, there are areas where you can identify common challenges across key procurement domains such as technology, market intelligence, organisational alignment and cost reduction.
However, there will be fundamental differences in the challenges that are faced as you dig down below these headline terms. Plus, they will both be experiencing distinctly different change dynamics.
So, my article started to balloon into a much wider piece and I therefore decided to tabulate my thoughts rather than write a long-winded article. Condensing the thoughts into bullet points.
The following tables are my first attempt to do this and I would welcome any feedback (chris.haddock@claritum.com), so that I can improve and develop this model.
2: Breaking Down the Domains
So, let’s start this article by breaking down the domains by nature of purchases. If we can do this, perhaps, we can then start to align challenges with these domains at a slightly lower layer than the obvious headlines.
These domains are not your classic procurement categories. These classic categories are aligned within the domains I am defining. Here we are trying to group categories that would have similar challenges.
The following table is my first attempt to do this and I would welcome any feedback (chris.haddock@claritum.com)
Procurement Domain Name | Procurement Domain Description | |
| Manufacturing supply | Supply of parts for a product | |
| Process supply (commodities) | Purchasing raw materials that are needed within a process industry (for example oil or chemicals) | |
| Marketing Supply (Hard) | Physical marketing goods that are necessary to promote your business | |
Marketing Supply (Soft) | Marketing services and systems | |
| Infrastructure (Hard) | Office space, machines, uniforms or physical tools that are necessary for your business to function. These have a longer shelf life, unlike consumables below. | |
| Infrastructure (Soft) | Software tools that are necessary for your business to function | |
| Resourcing | Purchasing resource time of people. This would include consultants, marketing agencies and accountants for example. | |
| Utilities | Gas, water and electricity for example | |
| Travel | Travel related requirements for employees | |
| Consumables | This would include, for example, office supplies and any food/drink for office consumption. | |
| Logistics / Freight | The purchases associated with the physical movement of goods sit here. Note: warehousing and lorries would sit as infrastructure (hard) and software as Infrastructure (soft) |