How to Be Strategic in Public Procurement and Government Contracting

It seems like every purchasing/acquisition leader I talk with (in both the private and public sectors,) as well as many or most of the practitioner-directed literature I read discusses their organization’s transformational journey. In my experience, most purchasing/acquisition organizations claim they are two to four years into a journey of radical transformation. They argue that the strategies followed by the recently departed CPO were woefully inadequate to meet the demands of the future. These radical transformations are invariably accompanied by sweeping organizational changes intended to move the organization from tactical to strategic procurement (whatever that means). Change is not only required but is almost always brutal: less than half of the current staff can make the transition. But, hey, it’s tough love and only the strong survive.

Though common, this approach to reorganization and right-sizing is a delusional journey. Rather than weeding out underperformers, it only serves to diminish critical supply knowledge, create bogus savings accounting, and reduce morale. Moreover, as a static, zero-sum game, the transformation is unvaryingly focused on a single company: Suppliers are not included in the vision except as sources of price reduction despite the lip service to total cost of ownership, collaboration, and improved asset productivity.

Here’s a prescriptive list that contrasts the differences between tactical and strategic. It also defines the distinction between collaborative and combative supply management transformation. Although hard to sell to senior leadership and even harder to do, right-hand column activity and behavior is the only way to promote genuine supply network transformation that can create and deliver absolute, sustainable competitive advantage.