Friday 15 June 2012

Sowing the Seeds to Cost reduction in your business

How much do you know about purchasing - and I don't just mean the banging your hand on the table shouting "Lower Lower". I mean the 90% of the work that was undertaken before that discussion with a supplier took place.

Unless you've had some purchasing training or read purchasing books I assume you may know more about gardening than you do about purchasing. Why - because whilst you may not be a professional gardener most of us at some point or other have had a garden, visited gardens, watched the multitude of gardening programmes, read gardening books, visited garden centres (if only for a cuppa) or simply sat in someone elses garden. That's a whole lot more exposure to effective gardening than purchasing.

That is, we all understand that plants in a garden need pruning, cutting, mowing, feeding, planting, composting, moving. Yet we forget to do any of these with suppliers and just expect them to grow where they're planted and look after themselves - and hope the weather gives them what they need as we certainly won't be!

Here's why I think we can learn a lot about purchasing from gardening:

Why do you want a garden?
Just as a garden might be low or high maintenance, for children or adults, for BBQ's, games or for lounging then purchasing has the same considerations. No use putting in place a garden that’s high maintenance if you’ve not got enough gardeners.

It's the same for procurement - what do you want it to deliver?

It’s nothing without design
Once you know why you want a garden you still need to consider the design and management of the garden. Will you have one gardener or a number and who’s in charge. Will you be needing a greenhouse and who will have keys for the tool shed? What type of plant will you be putting in that shaded area at the end of the garden under the trees unseen from the house - it had better be a plant that doesn't need much care and attention.

In procurement the problem faced is we've often got all the managers in the organisation thinking they can help with the gardening too. Capability Brown who designed Chatsworth Gardens was a professional gardener, and just like Chatsworth's garden doesn't let it's visitors do its gardening for it - organisations should leave procurement to the professionals.

What’s in your tool shed?
It’s not only about the number and types of tools in the tool shed but maintenance and replacement of them too. In some smaller gardens it might be ok to use the spade for many different uses but once the garden gets bigger and certainly once the garden is open to the public then the maintenance of the garden will become more important and more specialised tools are needed. You don't have to look far to see all the multitude of new tools available and realise that whilst many might be more for show many can and do save time and your plants. See this blog with visual representation of the different tools needed for buying, purchasing and procurement gardens.

Many managers and leaders in organisations assume there's only one tool to use in procurement, and they just want to use that, all the time. Our job is to ensure they understand the full breadth of tools in the procurement toolkit, and that their effective use is in the hands of the professional. You can't just let anyone loose with a chain saw!

Plant selection
Even for each type of plant there are different varieties each with their own unique characteristics – some needing direct sun, other partial shade, some needing nutritious soil and other being happy with their roots in clay! Matching the variety of plant to the characteristics of your garden is essential in ensuring the plants flourish and the time needed to care for them minimised. Of course once you know what variety you want and have decided whether you’ll grow them from seed or not you then need to decide where to source them from.

Suppliers are the same - choosing lowest cost every time, not doing risk assessment, nor understanding the supply market, suppliers, cost breakdowns, business requirements, supply chain analysis etc are just like picking a tree and then being surprised when it grows too big, blocks out the light, and its roots start to impact the house's foundations.

You’ve got to have a Greenhouse
If you live in the UK then there will be seeds and even plants that need some tender loving care (TLC) first. Time in the greenhouse to get more hardy before they’re planted out into the garden. Sometimes when we unexpectedly end up with snow or frost in May, or the west winds threaten a gale force, we may need to bring plants in.

When did you last review the performance of your suppliers and consider how your actions are contributing to how well they are flourishing? What would giving a supplier TLC look like?

You might be lucky and a plant might survive if you just dump it in a corner and forget about it. And whilst that might seem unthinkable in a garden it’s certainly what many businesses do to suppliers – no perfect position, no careful planting out, no watering, no feeding, no staking. Plants will certainly survive and flourish and even multiply if given the right care and attention - suppliers too.

Garden Maintenance
We’ve all heard about jack’s bean stalk or the perils of Japanese knotweed - maintenance is certainly needed to ensure the plants stay within the area originally designed for them. Turn a blind eye and weeds can take hold and smoother or even kill other plants. It’s also useful to have someone with knowledge about plants doing this otherwise it’s easy to uproot a perfectly healthy plant and leave the real weeds behind.

Isn't that the same with suppliers - we need to mow, feed, prune, cut back and compost suppliers. Otherwise one of these horror stories of procurement gone wrong could just be your organisation!

In conclusion
Healthy supplier relationships are no different to healthy plants – next time you start thinking about introducing a new supplier just think about whether you have the skills and environment that will enable them to flourish in your organisation. For more analogies between procurement and gardening see my Pinterest Board on the subject.

Alison Smith
The Purchasing Coach
Sowing the seeds so your purchasing garden wins best in show  +44 (0)7770 538159

Post Script Jan 16:

I'm surprised I didn't mention that I've used this metaphor with a number of organisations, and delivered workshops to over 200 managers using gardening to enable them to understand the benefit procurement can add.

Related posts written since this post was published, that may also help explain more, include (just follow the hypertext link):

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