Procurement decisions are based on information provided by contractors and suppliers.
This information must be accurate in order to come to the correct conclusion on the winner of the tender or RFP. Proper care must be taken to evaluate and check all the pertinent information supplied by the bidders for accuracy.
To a very large extent strategic planning depends on the flow of information within the organization and the ability for purchasing and senior decision-makers to process the information that they receive.
The need for information underscores that senior management both in public and private sector organizations are not just about planning. Senior managers cannot afford to be above reality, remote, detached and inhuman. To seek out information, they must be visible throughout the organization.
Strategic planning in procurement seeks to rationalize the problem of decision-making to the greatest extent possible, the goal being to ensure that all decisions made are objective, based on fact, consistent in object, logical in approach and realistic in nature.
However, even with the best will in the world, there are tight limits on the extent to which this can be done. Ideally, every manager deals with problems methodically, drawing upon proven and scientific methods such as the analytical tools of management science and operation’s research to assist in this process. In the practical world, every procurement manager frequently must respond to situations rapidly. Information may be limited, as may the time available for decision-making, especially in the private sector.
In order to respond at all, it is often necessary to cultivate and relay upon intuition. In such circumstances, there is no element of choice. One must respond best as circumstances allow. Sometimes it is the recognition that the strategic planning process cannot work if it is overly prescriptive in matters of detail.
There is reason to believe that strategies have the greatest potential for success where they result from a controlled, conscious process of formal planning using tested and proven techniques, rather than from some ad hoc brainstorming on the part of senior executives. It is also necessary to focus the planning process, to ensure it is balanced and based on proper input from across the organization.
It has been clear over the years that problems stem either from a failure on the part of strategic planners to consult sufficiently with those who are the face of the organizational operations, or a failure to place sufficient emphasis on the need to develop a unified strategy for the organization as a whole.
It is the drawing of this difference between consultation and co-ordination that constitutes one of the difficult obstacles to overcome in practice.
On the intuitive level, given the range of problems that can arise, it is highly unlikely that all of them will be successfully avoided when organizational planning is approached in an ad hoc way. Hence the need for a formalized approach to strategic planning.
When it comes to procurement, a strategy must be sufficiently comprehensive that it encompasses some method of finalizing the detailed aspects of operations during execution.
It is one of the responsibilities of the most senior officers in the organizations to develop the strategic plan. However, they must be prepared to draw upon the expertise and more extensive knowledge of practical environmental conditions of lower level managers in the course of that process.
By utilizing their ability to draw on others as a resource they will produce a balanced and realistic plan of action. It is necessary or advisable to go further, so as to not interfere with day-to-day operations or the need for local initiative.
At the same time, it is essential to exercise enough oversight so that the plans of each department, division and section within the organization are co-ordinated and focused.
Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.
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