Supplier Classification – How to show suppliers where they stand

Recently I commented on a LinkedIn discussion,  “Presently I am looking to devise a simple classification structure for my supply base – something that will allow my suppliers/providers to know where they presently stand from an engagement/expectation perspective and that shows them what they can work towards…. Does anyone have examples of such structures that they can share?”

My reply (edited): Continue reading

E-auctions: when (not) to use them… and dirty tactics to look out for!

A recent article in Procurement Leaders magazine, “Are e-auctions all they are cracked up to be?”, concludes “by taking the personal touch out of the bidding process, you’re losing the opportunity to leverage your face-to-face skills to get really [to] know a potential supplier.” The article seems to be founded on the premise that e-auctions (reverse auctions) might typically be run in circumstances where buyer-supplier relationships are important.

I have been a long-standing critic of indiscriminate use of procurement e-auctions. Reverse auctions do have an important place in the procurement toolkit but are often misused. So, what constitutes misuse?  What can go wrong? And when is it appropriate to use reverse auctions? Continue reading

Procurement for Projects? …or Business as Usual?

In a recent exchange on Twitter, I was asked if I had any writing on procurement in the context of projects, as there is very little coverage about this topic for Project Managers.

Is procurement for projects different from other procurement?

There are opposing arguments, on the one hand that procurement for projects is very different from other procurement, on the other hand, that the ideal approaches to procurement are very similar whether for projects or not, and that the approaches become different only as one makes compromises. Such compromises would arise as a consequence of differences in objectives for projects and ‘business as usual’ (BAU), and from constraints in the capability of the procurement resource. Compromises may also be forced by late involvement of appropriate procurement expertise. Continue reading