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July 2011 | Adam Leach
SMEs remain unaware of the value procurement can bring to business, according
to a consultant.
to Ray Newell, consultant at OakwellManagement Services
and co-author of a recent book on spend management for SMEs, small businesses
often have only a basic knowledge of procurement – such as how much they spend
on goods and services each year – because of their limited resources.
of the key questions we ask SMEs is 'can you identify, without referring to any
documents, how much you actually spent on goods and services last year?'” he
told SM. “You'd be surprised how many
can't actually give you an answer.”
asked what he believed the main disadvantages SMEs faced compared with larger
organisations, he said: “What purchasing actually contributes to the
organisation in terms of understanding how much they do actually spend; the
lack of control they have when they meet with suppliers; the fact they could
work cumulatively together with SMEs in consortia agreements; and just the
overall impact [of procurement] really.”
along with Oakwell chief consultant John Kelly and Marc Day, professor of
strategy and operations management at HenleyBusiness School,
has been working on Manage My Spend
since 2002. The book aims to help small businesses understand the basic
fundamentals of procurement.
research for the publication, the authors worked with an SME in Lincoln to help
develop its procurement operations. They found that the employee responsible
for purchasing was spending 90 per cent of his time on an area where only 10
per cent of expenditure was spent.
book is supported by CIPS and funding has been provided from
Regional Development Agencies and the
European Regional Development Fund. It also aims to provide a bridge between
those with no proper procurement training and becoming a full member of CIPS.