“ The harsh reality is we must build this capability in organisations so that practitioners can maximise the delivering of valueadding outcomes ”
DAVID LOSEBY MANAGING DIRECTOR , BARKERS COMMERCIAL CONSULTANCY
The Pursuit of Lowest Cost “ One of the things that academic researchers have amplified recently is the fact that the pursuit of absolute lowest cost has driven us to monopoly supply situations and very complex supply chains . The reality is that in the quest to drive out cost and reach the Nirvana of the lowest cost , we ' ve inadvertently sleepwalked into increased risk and more fragile supply chains .”
However , there ’ s a high price to pay for identifying potential suppliers and awarding business based on price alone . Loseby remembers an old procurement acronym , AQSCIR , which he believes procurement professionals should still live by .
A- Assurance of supply Q- Quality S- Service C- Cost I- Innovation R- Regulatory compliance
“ As far as I ' m concerned ,” he says , “ Unless you can sufficiently satisfy all of those six factors , you ' re not delivering the right solution . You ' re not delivering value . And it ’ s imperative that you get that balance right . You can ’ t have the best price without assurance of supply , for example .
Loseby says procurement leaders show their value through their ability to focus on all six of the attributes . Sharing an example from Rolls Royce , he digs into the varying factors at play when evaluating suppliers and developing solutions . “ We started to talk about the value that we delivered in terms of decreasing the number of peoplehours that we needed to invest in a particular process or activity , higher levels of quality and assurance , or dual supply . It was a wide variety of considerations that combined allowed us to bring a higher quality solution to the table , sometimes even including looking at entirely different ways of delivering either goods or services .
48 July 2021