So Procurement Is Transparent. And Is That It?

transparency procurement

Hospitality forms. Anti-Bribery acts. Spend policies. Gift policies. Forms and declarations and more reports. Especially popular and famous among people who work in procurement. Has anyone measured, if it works? And if so – how? “Transparency is new green” in procurement, I read. Transparency is a new fashion in strategy. Is that all that it takes to make your business successful?

The Importance Of Attitude

From my own experience – it is more about the intuition and my own attitude. I would never do something to feel committed to a supplier. It does not even matter what it is: asking for tenth set of “free samples”, demanding to take on any sort of unjustified costs… If there is a question on who is paying for the dinner – I would choose not to go at all. One thing is simply being polite and humane. Another – fake political correctness. Imagine a person, who has a will to abuse his/her own company. Do you think hospitality form will stop them? I dare to completely disagree. While if a person is trustworthy – additional forms will only create additional workload and frustration, nothing else.

Is Transparency applicable only to Procurement?

So you have developed five policies, created seven forms for your buyers. Good job! Really well done! I assume, now you feel safe? Think again! It always takes at least two to tango, I bet you heard about that.  I had a dilemma once in my life, while being a commercial director. That is, I was responsible for purchasing and for selling. A prospect customer’s buyer asked for “bonus”. For a commercial director it means guaranteed sales. In big quantities and for quite some time. I went to talk to a commercial director and co-owner of that company. The buyer later on admitted his wrong-doing and was fired; the sales never happened and we lost that client in the long run. Not everyone is like me. What would you do?

Examples from other departments

  • Sales guys issuing fake invoices on the last day of the month and then cancelling them some time into the next month. Nobody likes angry managers at monthly reporting meetings.
  • Managing directors keeping out-of-date and bad quality items in stock, thus trying to keep the value of the inventory – and the company itself, at the same time – way higher than it actually is. Nobody wants to sell a company with a loss (that is, if they would manage to find investors).
  • Retail shops, which from time to time “re-label” the “best before” stickers on some items. Who would want to lose money, right?
  • Road workers, who “save” some tarmac from the roads they are building. And, magically, some newly built private property entrance roads appear next to the main road being fixed. Nobody wants to miss the opportunities.
  • Sales guys, getting “personal incentive” from third parties for reducing the prices lower than company’s official policy.
  • Invisible staff! They are on a budget, on a “head count”, but never appear at work. Rumours – only rumours – sometimes say, they could be close relatives to those who have the hiring decision power.
  • Technical departments, writing product specifications for a single product from a single supplier.
  • Accountancy scandals – which often go very loud. Or people with access to cash money…

I realise, that transparency is important. But it is equally important throughout all departments – not only procurement. Most importantly, a person’s intentions and attitude have to be obvious and appropriate. Then everything else will come as a given.

Thank you for taking the time to read! Please feel free to drop a line with your opinion!

So Procurement Is Transparent. And Is That It?

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