Analyzing the Results of Your Procurement Project Accurately

Posted by Steve Clymer

Topics: Company Information

bigstock-Person-Analyzing-Financial-Sta-99923510.jpgTaking a systemic approach to assessing the final results of a procurement project can help you identify the strengths and weaknesses in your approach to procurement, your vendors, and myriad other aspects of your business. Assumptions without a thorough analysis only lead you further astray, so it’s important that you investigate each of the four major areas we’ve laid out in our procurement project results scorecard. To help you understand what you’re looking for and what to expect, this guide to analysis will lead you through each area and it’s nuances:

Quality

First and foremost, you’re going to want to look at the quality of the goods you’ve received. Nothing else matters much if you find you can’t make use of what you’re receiving, or you’re worried about the long-term impact of using what you’ve received in terms of safety, customer response, etc. Here are a few individual points to look at in considering quality:

  • Overall quality. Or, basic ability of the received goods to fulfill their original purpose. Don’t look at this as a binary state of ‘good enough’ or ‘not good enough’. Consider the nuance of the quality; is it better than expected? Worse, but still viable? Do you think you can expect improvements in the quality?
  • Consistency. Inconsistency in many ways makes for a worse result than generally low quality; poor quality can be addressed with improvements, but inconsistency may indicate bigger problems in the procurement process.
  • Details. The fine details of a project often end up changing in the face of the realities of procurement—what do these details look like on the current project?
  • Quality/cost ratio. You get what you pay for—or rather, you should. Judging quality or cost without setting them against one another provides little benefit to assessing a procurement project. Look at your ROI, here.  

Ease of Working with the Vendor

pros.pngProcurement ultimately boils down to communication. With the right tools and the right vendor, the process should be painless for everyone, produce quality matched to your budget and goals, and allow for problems to be resolved rapidly. To better understand your relationship with your vendor and thus assess your current procurement project, consider these sub-points:

  • Clarity of communication. A simple concept: do you easily stay on the same page with the vendor?
  • Accessibility. How difficult is it to get the right person on the phone to resolve an issue or discuss a change?
  • Professionalism. Are appointments kept, do you feel comfortable communicating with the vendor, and can you expect honesty in communications?
  • Efficiency. Is your communication with the vendor characterized by rambling, ineffective conversations, or concise interactions backed by appropriate tools? Phone tag over weeks to clarify minor details shouldn’t be necessary with the right approach.

Delivered on Time

Did all procured items arrive on schedule? If not, why? While a failure on this point certainly isn’t a good thing, it’s important to identify the root cause of a failure—or unacceptable sacrifices made to achieve success. Don’t view delivery on time as a purely binary pass/fail state, despite its importance.

Quoted Cost vs. Final Cost

In a procurement project, few things should set off more red flags than discrepancies between quoted costs and final costs. Add on charges stemming from poor planning or unscrupulous business practices are completely unacceptable. If the problem stems from your side of the equation, due to a lack of clear communication or other problems, it’s something to be resolved with improved communication. Of course, problems which are superficially your fault may be the result of low accessibility and other vendor issues; consider this point carefully.

 

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Topics: Company Information