Written by David Lyon

What to do when s*** hits the fan in procurement

One day it’s going to happen to you – so how does one handle a crazy day in the procurement world, you may ask? Let’s dive in.

Whether you like it or not, you can’t plan for every unexpected scenario. It could be anything; a fire in a warehouse, a key supplier that collapses, a typhoon in Asia, or something as mundane as a vital container dropping off a vessel.  

So what do you do?  Here’s a quick checklist that will help you handle most situations: 

Pause

You may be tempted to rush into action but it’s worth spending half an hour to assess the situation.  What do you know? What do you need to know?  Who has the knowledge that you need to know?

Don’t be afraid to challenge the information you’ve received.  Is it accurate?  Is it proportionate? Is it balanced?

Read and re-read your Business Continuity plan

If you’ve got one, read it! The cool-headed thinking you put in place when the plan was made, will be critical now that the event has happened.

Pull together the team that will sort out the issue

Collect and brief your trusted “A” team that you know is expert at solving problems.  These may not be subject matter experts, but more likely the team members who have an ability to assimilate all information and move to a decision as a team.

Inform and get everyone else to stand down

The last thing you want is several teams working independently or large committees.  Ensure that everyone is aware of who is tasked with addressing the issue … And who should focus on managing the impact on business as usual.

Define your options

As in the Pause step, the temptation is to rush to the first solution.   This may not be best, so take another hour with your team to define what the options are.  Remember that disasters sometimes are a good point to pivot and change direction.

Decide quickly which is the best option – your “Plan A” – and put your best people onto this

You should put your most decisive, agile and skilled team into pursuing the best option.  But hold a few resources back.

Don’t throw out good procurement practice

Covid 19 and Brexit have shown that even in the UK and US, urgency situations have led politicians to award large contracts to suppliers that don’t have the capability to supply.   Keep your cool and challenge yourself and others.   Is this a supplier I would select in normal times?

Prepare to change your mind

In the first hours in a crisis, recognise that the situation may evolve, or that your priorities may change.   So get the remainder of the team to start working on alternative options – “Plans B and C”.  

You may never need to take these alternative next steps, but if you do, you’ll be pleased that you’ve already taken these preparatory steps.

Review and Re-assess frequently

The key to responding to disasters is communication and frequent review.

  • Is there any further information?
  • How is “Plan A” progressing?
  • What other steps can we take to prepare for alternatives – “Plans B & C”?
  • Who needs to know more? 

Learn from the crisis

The airline industry has learnt that a disaster is a real world opportunity to improve safety and security.   So spend time to work out what the underlying causes of the disaster were and what you could have done to avoid it.

Above all, responding to adverse supplier events in procurement is all about cool, effective management of the situation and the people involved.  Remember that the procurement knowledge is broader than most departments and our core skill is in bringing people together to make the best decision.   

In a crisis, procurement has the oversight and skills to step up and lead the organization back to normality.

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David is a CPO with experience across multiple industry sectors. Having started his career in textiles and retail, he has since had senior roles in the Electronics, Pharmaceutical and Financial sectors, including Global Head of Corporate Procurement for Pharmaceuticals at Novartis Pharma AG. David led the Cancer Research team that won the 2015 Procurement Leaders award for Transformation and has since delivered "Transformation of procurement" in several well-known multinationals. David is a multilingual professional with over 25 years of Procurement and Supply Chain experience.

David Lyon