Strategic value - Supply Management

Strategic value

12 July 2011
David Noble, chief executive, Chartered Institute of Purchasing & SupplyBefore the July issue of SM reaches your desk, the day of public sector strike action planned for 30 June will have been and gone. No doubt the headlines will be full of dire warnings about the start of a ‘summer of discontent’. If all the public sector unions pile in, this is bound to cause considerable disruption when you consider that the services their members provide touch every aspect of our everyday lives, from healthcare and education to local government and the voluntary sector. Now that the Organisation for Economic Co-operation and Development (OECD) has given its backing to the government’s measures, it is unlikely that we will see much softening of the policy. However, instead of talking all the time about cuts and losing services, we ought to be talking about creating value. With smarter and more efficient procurement, it doesn’t have to be a lose-lose scenario. There’s a real risk that making decisions on cost grounds alone will provide a short term fix that will end up costing more. We have to take a longer term view and it’s up to us as procurement professionals to make sure that we are seen not as cost cutters, but as value generators – but ‘value’ is an elusive concept to pin down. Cost reduction is certainly part of the story, but that’s about getting the right stuff at the right price. What I want procurement to do is influence what I like to call ‘smart demand’ and leverage supply markets to deliver greater efficiencies. This means developing better relationships not just with suppliers, but across other departments. In the local government context, this gives procurement professionals the opportunity to drive value in their own area. At last month’s Public Procurement Show in London, commissioning became a hot topic of debate as another value driver, but we have to get our terminology right. Commissioning, I believe, is synonymous with strategic procurement. In fact, it is strategic procurement. The UK government also thinks so, and that’s encouraging. The issue of public sector cuts isn’t one that will go away. Whether there are strikes or not, savings still have to be made and procurement has to play its role to add value, to reduce costs and understand the influence the profession has on actually making a difference. Council election winners The results of this year’s Council elections were announced at the institute’s AGM in Birmingham held on 18 June: Asia: Jing Liu MCIPS Scotland: Janet Matthews FCIPS North West: Andrew Croston MCIPS North East: Hayley Addison MCIPS West Central: Ian Parkes MCIPS North Thames: Sam De Silva MCIPS South East: Ian Thompson MCIPS South: Rachel Lee MCIPS Construction: Julia Fancourt FCIPS Transport: Steven Morgan FCIPS Emerging Sectors: Steve Johnson FCIPS The elections for the East Central and the new Europe/Middle East seat resulted in a dead heat and the ballots are being re-run to determine the winners. Thanks to everyone who applied and congratulations to our new Council members, who will be taking office on 1 November. ☛ If you have any comments or wish to raise a topic, please get in touch at ceoblog@cips.org
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