Insights
Procurement Does Not End When the Contract Is Signed. That Is Where the Real Work Begins.
There is a mindset in procurement that is becoming more common. It should worry people.
It goes like this: procurement sources the contract, hands it to the business, and from that point on it is the business's risk to manage.
I understand where this comes from. Procurement teams are stretched. Scope is hard to defend. And once the contract is signed there is always another sourcing activity waiting.
But this mindset is not just short-sighted. It is genuinely dangerous.
The Real Cost of Poor Supplier Relationship Management Is Not the Price Difference. It Is Everything That Never Surfaced.
Some time back I was invited to conduct a strategic procurement review of how an organisation was managing part of their indirect spend.
It was a fragmented portfolio. Site managers had been coordinating their own contracts for years. I was told they were happy with how things were running. They believed the contracts were working well.
It did not take much digging to find the same supplier charging different rates at different sites, including within the same geographic area.
Nobody had noticed. Nobody had time for supplier relationship management.