All posts by Charlotte Spencer-Smith

Young, Female & Stuck in a 1950s Procurement Department

It’s the 21st century, so why, as a female, do so many procurement departments feel like they’re stuck in the 1950s?

female 1950s procurement

It’s a news story that never gets old: women are still paid less on average than men.

Procurement is a profession that continues to perform poorly compared to other industries. CIPS research has found that there is a 21 per cent gender salary gap for private sector advanced professionals. In real terms, this means that women receive £12.7k less per year at this level.

POOL4TOOL’s partner, Kloepfel Consulting also performed research on the Procurement market. It’s findings were almost identical.

This is the 21st century – shouldn’t things be different?

Workplace culture

Part of the problem is cultural. Biases that underestimate the economic power of women remain, even in relatively progressive countries. Some workplaces still have an inflexible culture that is resistant to change. These are often the kinds of workplaces that suffer from subconscious discrimination against women.

This is even true of workplaces where women are well-represented. This puts women and minorities at a disadvantage. It also suppresses new ideas, innovation and necessary change.

Young, female, ambitious

But this is not an employer Boot Camp – this is the Procurious Career Boot Camp! So what can a young female professional do if they find themselves in an environment that is still mired in the 1950s?

Before I landed in my current role, I spent my 20s in a series of different work environments. I’ve also had my fair share of horrendous career advice over the years.

So here are my top three career tips from a decade of being young, female and ambitious in the workplace.

1)    Don’t be afraid to be different

There is a time to learn the ropes, and there is a time to do things differently. While there is pressure to behave the same as more established employees, you will stand out for the things that only you can do. This also represents added value for your employee.

Procurement is an important interface between company departments and suppliers. Being yourself and thinking independently is a key strength in managing relationships.

Put it this way – nobody ever got into a leadership position by being like everyone else. Whether leading from the front as a manager or leading from the back in another role, leadership requires the courage to be different.

2) Capitalise on low-value projects

At the start of your career, sometimes you have to live with low-value projects. This can be frustrating, especially when you see colleagues with glamorous assignments.

However, low-priority projects are great precisely because others are often not interested in them. This is an advantage because it gives you a lot of free reign to make a project your own and turn it into a success.

It is tempting to hold back from making low-value projects successful. The fear is that you will get even more low-value projects. But this could result in no success at all. It also gives your employer no way to measure your abilities.

Some employers do give low-value projects to successful employees ad infinitum. Those are the ones that need to change their staff development policies!

3) Accept that you will be a different person in 6 months

If you’re anything like many talented people, you may not believe in your own abilities. There are a lot of bright people who think that they are not competent or experienced enough.

But young professionals have a great capacity for high learning curves. They can also quickly pick up competences from their environment.

If you can’t do something now, in 6 months’ time, you could already have the confidence and the ability to perform that task.

The Procurious Career Boot Camp is a great place to exchange thoughts and experiences. Do you agree with my three tips? What have been your experiences? What are your tips?

Cost Breakdowns – As Much About What’s Important As About Price

“As I hurtled through space, one thought kept crossing my mind – every part of this rocket was supplied by the lowest bidder.” John Glenn, NASA

SLS-launch-at-Launch-Complex-39B-at-Kennedy-Space-Center-in-Florida-NASA-image-posted-on-AmericaSpace

Time was that the old-school view of procurement, as illustrated above, prevailed. Of course, since then, times have changed, and procurement has emerged after the Lopez era to prioritise quality alongside purchase price.

However, companies continue to hold purchase price as a primary driver in making decisions, with other factors remaining as things that need to be taken into consideration somewhere along the way.

Procurement organisations following this track are likely to find themselves under more and more pressure in the coming years without really understanding why. And it is because the concept of cost itself is changing – and nowhere is this clearer than in the cost breakdown.

Changing the Meaning of Cost

There are two things changing what cost means. First of all, procurement is expected more and more to act strategically. In addition to all the obvious costs on top of purchase price: installation, operating, maintenance, and disposal costs, procurement is expected to think several steps down the line, or at least should be.

As well as looking at short-term cost, it is important to have an idea of future prices, and therefore the behaviour of the cost drivers that might influence this. Not all purchasing is a simple transaction – suppliers need to be developed, strategies need to be formed.

In structuring cost breakdowns, procurement organisations have to ask two key questions – am I making the best economic decision today? Is my decision helping my company to gain a competitive advantage tomorrow?

Secondly, the development of information technology and increasingly globalised supply chains present a wide range of risks as well as opportunities. This all has an effect on what we mean by cost. Globalisation is opening supply chains up to new risk challenges: the unknown quantity of a new supplier from abroad, disruptions from natural disasters and political instability, differing local conditions like lead times, and growing awareness of lacking environmental and labor standards outside of the EU.

The same global media network that can feed vital information to procurement organisations also opens corporations up to risk: specifically brand damage when an environmental or labor scandal goes viral, with all the costs of revenue loss and re-call expense that come with it. Global brands like Apple and Adidas have recently become much more active on this front in China.

Coupled with incoming legal requirements in Europe, such as the UK Modern Slavery Act, procurement organisations have to factor much more into their cost breakdowns. It’s no wonder that people talk about procurement delivering value.

Procurement Value

This is a colossal amount of information to process. But procurement value is not some nebulous concept floating over all of this. It’s simply a matter of defining what is important for your company – what is going to produce value. Maybe it’s making productivity faster or better, maybe it’s reducing risk in quality or in logistics.

You can only identify this by working with your internal customers, for example, engineering and manufacturing, and working cross-departmentally. Procurement professionals will also need to be attuned to how values change across an organisation. For example, as public awareness of supply chain ethical scandals grows, procurement will be expected to value Corporate Social Responsibility as much as other departments.

Crucially, these values can define what gets prioritised in the cost breakdown and help you navigate the jungle of information out there.

This is also where technology can play a massive role. With an expanding market in procurement technology, especially in Software as a Service (SaaS) and big data analytics, there are great opportunities to bring together the data you need in one place, rent extra information from business intelligence suppliers who can turn qualitative information into figures, and understand it all in a way that makes sense to you.

As the nature of cost changes, procurement organisations need cost breakdowns that do justice to this. It follows that they need to select the right software to support new cost breakdowns.

One thing is for sure: the day of the Excel spreadsheet cost breakdown is over.

Charlotte Spencer-Smith works for POOL4TOOL, based in Vienna, Austria.