In a recent LinkedIn thread in the People in Procurement, Purchasing, Logistics and Supply Chain group, the issue of communication in procurement came up. The procurement department stands in the middle of any project’s road from inception to completion. Procurement faces many obstacles as it helps push the project down the road, but several commenters came back to the idea that many of these obstacles originate in lack of a procurement communication plan for engaging internal stakeholders.
Procurement professionals can no longer hide away in a silo. Since Procurement KPIs have moved away from cost savings, collaboration with internal stakeholders is now essential. The basis of successful collaboration always starts with good communication.
Create a plan for internal stakeholder communication
One way to improve communication is to take a look at the structure of the procurement department and identify who’s responsible for communicating with stakeholders outside of the department.
Most likely, category managers or the procurement department manager will be responsible for communication with stakeholders. Regardless of who is ultimately responsible, he or she must have the support of the C-suite. If top level management recognizes the value of the procurement function, then these attitudes should trickle down, making it easier to encourage more open communication between Procurement and all other divisions.
1. Once your structure is in place, the next step is to divide and conquer. Segment your stakeholders and prioritize them.
2. Decide how often you will communicate with them and in what format. For some, weekly email bulletins might suffice; for others, you may need a monthly face-to-face.
3. Make sure to frame your messages in a way that emphasizes what value procurement can and will provide them.
4. Even after you’ve developed a strategy, try to remain flexible and take into consideration stakeholder preferences for communication frequency and formats.
Encourage stakeholder involvement
Once you’ve created a strategy for communicating with internal stakeholders, get them involved in the sourcing process.
Ask for opinions when selecting suppliers to be invited to participate in an RFP. Get their assistance when comparing bids and selecting a winner. By encouraging involvement in the sourcing process, you’ll get the insight you need from the specialists in the field, which will help you make better informed sourcing decisions. This will also increase accountability for these decisions across departments and help stakeholders see firsthand the value Procurement can offer.
On the LinkedIn thread, Andrew Scotney pointed out that procurement can be the most difficult aspect of any project. Carrying out the process successfully often requires procurement professionals with in-depth knowledge of the materials being sourced and the market. Even if the ideal candidates can be found, it can be hard to retain them since procurement is often the first department blamed for operational failure and budgetary overrun. He went on to say that improvements to the communication process can be the best place to start when looking to resolve these issues.
In fact, Procurement should be involved from the very beginning of any project, even as early as the design phase. In an article on My Purchasing Center, Pat Meagher, Executive Vice President of Product Realization at Riverwood Solutions, talks about why he has sourcing get involved with design: it avoids designers creating something with locally sourced components that they then have to duplicated by manufacturers overseas. By using overseas components in the design from the get-go, redundant processes can be avoided.
By including your internal stakeholders in conversations from the beginning of any procurement project, you will help move Procurement from the backroom to the boardroom to get the respect it deserves as a valuable organizational function.