The Lectern:
Being a procurement professional in South Africa and the US
By Steve Kelman
Published on July 17, 2007 - 04:00 AM
I had dinner Sunday evening with a leader of the government procurement community in South Africa, and we spoke about some of the issues she was working on in the government organization she works for. Her organization has set in motion a process to do 12-week market research projects on the major supplies the organization buys. During these 12 weeks, procurement professionals work to understand how the commercial market buys the products or services in question. The example she gave me involved buying steel (of which her organization buys a lot). The natural intuition, she noted, would be to assume that the best way to buy steel would be through the manufacturer, avoiding a "middleman" distributor. Closer examination, however, revealed that distributors got the best prices from manufacturers because they bought in such huge quantities, and it actually made more sense to buy through them. Once the market research happens, the government can then work to negotiate strategic sourcing deals to get the best quantity discounts and other terms (e.g. delivery speeds, warehousing). As she spoke, her face lit up with enthusiasm and commitment. Getting a good deal for her organization was very clearly a matter of professional pride for her.
All of this required, my dinner companion continued, that procurement professionals become business experts, not clerks. That in turn dictated a major effort at building the capacity of her organization's procurement workforce, which is ongoing now. As I listened to her speak, what impressed me was the similarities between the issues procurement professionals face in countries as different as South Africa and the U.S. Towards the end of the evening, this South African procurement leader said to me, "Knowledge is the weapon of choice in procurement."
That's a quote that could apply to the U.S. equally well.
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