In February I wrote about the shroud of mystery that seems to surround procurement (the misconceptions that flourish, the key role that procurement actually plays, and the barriers to understanding that need to be surmounted) in “Procurement: Friend or foe?” – an aptly titled article that proved to be quite popular with our readers.
Undoubtedly, an increasing number of clients are now sourcing creative services via systemised processes. But the real story is that procurement works for agencies too – especially for event management and exhibitions. As more and more clients start using benchmark criteria and scoring to gauge the value of delivered projects/events, the onus is on the agency to optimise each proposal and bid that it submits.
In other words, an agency needs to identify opportunities for smarter purchasing (from suppliers) and efficiency improvements (as an organisation) that directly impact a project’s cost to the client. By doing so, the agency also creates and maintains an edge over competitors for winning pitches, managing events and delivering success.
Perhaps the time has come for agencies to have their own dedicated procurement resources too. After all, it is procurement’s task to ask two very important questions regarding the acquisition of goods or services. First, are the specified goods or services fit for purpose? Second, are they being procured at the best possible cost – in terms of quality, quantity, time and location?
In this follow-on article I share Action Impact’s approach to procurement and the key things to think about from an agency’s perspective – all based upon our own experience of setting up an internal procurement department. As we often work to very challenging deadlines (and have over the past decade built up a well-deserved reputation for delivering the impossible), the last thing we wanted to create was an internal bottleneck!
And so, after careful analysis and much discussion, we established three founding principles to guide and focus our procurement department. These can be summed up as:
Rule #1: Support operational requirements
It is vital that our procurement staff understands what we do (or rather what our clients contract us to do). And that is to deliver exceptional events and experiences. Our goal is not to save money per se – but to make sure that budget is most efficiently utilised. This means we choose the appropriate set of specifications and quality criteria for each project – not a one-size-fits-all approach. We also need to be kept updated on the latest developments in materials, technology and expertise – so that we purchase the best solution from the best source at the best price.
Rule #2: Manage the process and the suppliers
It is important that both Operations and Procurement work together to identify opportunities while managing internal expectations. Adherence to the approved procurement process is essential – this involves evaluation/selection of suppliers, and the subsequent hire/purchase of goods or services. But more crucially, specifications should be reviewed at all stages of the project’s lifecycle – especially if these learnings can be applied to future projects. Thus, over time, we create a standardisation of elements that we hire/purchase on a regular basis – this in turn allows us to not only negotiate better deals with suppliers, but also forecast and pre-plan our requirements.
Rule #3: Develop strong relationships with suppliers
We view our suppliers as part of our team. The miracles we are famed for performing when faced with unexpected obstacles or last-minute crises would not be possible without the close working relationships that Action Impact nurtures with its supplier network. Our procurement department must maintain this culture of trust while working to optimise our purchasing. And, it is equally important to identity new potential suppliers and develop/expand relationships to fortify our network – this can be a lifesaver when we need a hundred backlit panels or a thousand giveaways overnight!
Finally, in my earlier article I touched upon how the lack of event management and exhibitions experience can easily create challenges for client-side procurement teams that traditionally hail from industrial or construction sectors. This is why we made sure our internal procurement department is only staffed by specialists who keenly understand how procuring for bespoke events is quite an art in itself!