Procurement in the Vanguard of Change
'Our procurement is in the vanguard of change and we are highly respected in our business'.
This positive statement from the Director of Procurement in an international business caught our attention. What are the risks of being in the vanguard of change? Potentially, there are many, each requiring a unique approach and the ability to convince many stakeholders that they are part of the change.
Changing the source of supply is a challenge. We know this from personal experience. A good example was our retention to locate suppliers in Vietnam for a French organisation who required 'local content' when bidding in the Far East.
We found suppliers and arranged for items to be supplied for quality testing. The first objection was the Quality Manager who immediately said that anything from Vietnam would be rubbish, or words to that effect! Needless to say, the items were approved and the relationship was a success. In a related context there are powerful reasons why some people don't want to change suppliers.
One reason is fraudulent activity. This is an emotive subject in the context of procurement. Why? There are some organisations who delegate procurement decisions to the most unlikely people who are demotivated to manage the risks. Who monitors the delegated decisions?
It may rest with Internal Audit to do so. That may be unfortunate if Internal Audit don't know the 'tricks of the trade'. We have trained Internal Audit teams when they were contemplating audits of procurement. Our task has been to persuade them that procurement audits are far more than conducting a tick list. It is the interpretation of actions that will reveal good or poor practice. Our risk modelling tool PROCURISK is a tremendous asset for Internal Audit and procurement specialists. It will positively support change and assist in developing mitigation strategies.Why not try it for Free
Our Managing Director, Brian Farrington welcomes a discussion on this and related subjects. In the first instance please contact him by email at email@example.com