Who foots the bill?

2 November 2010
Lindsay Clark, international news editor, Supply ManagementWhat, exactly, does procurement do? It’s a question that’s been troubling me for some time. Maybe I should rephrase it. What is procurement good at doing? It troubles me because sometimes I think procurement has something of a split personality. Is procurement there to get better value for every pound spent? Or is there another agenda? Yesterday we saw international services firm Serco perform an embarrassing U-turn after it had requested its suppliers chip in with a cash rebate to help it meet the government’s request to cut costs. Although I’m not inclined to feel sorry for international services firms, the government’s position does seem a tad duplicitous. It says that we must protect small UK suppliers, but it’s okay to hammer big international ones. Meanwhile Sir Philip Green put forward a logical plan to get better value out of public funds by delaying payments to suppliers, only to have it slammed by enterprise tsar Lord Young. So can procurement be good at getting value and supporting the UK’s small businesses at the same time? Other agendas can also create conflict. Sustainability and ethical treatment of workers are worthy goals, but is the procurement the best means to achieve them? Some would argue that by ridding your supply chain of unethical working practices you are providing value; you mitigate a severe risk to your brand. That’s okay, so long as you’re open about it and endeavour to measure it. But is the government being open about procurement? You can’t cut billions from the supply chain and not expect it to hit suppliers. The money has to come from somewhere.
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