Lean Procurement – an early bird analysis

 In this guest blog, John Pendlebury-Green and John Jones from strategic sales architects Landseer Partners discuss the Government’s plans to introduce lean procurements, an approach which should shorten procurement times, reduce bidders’ costs and encourage greater SME participation

Lean procurement is being piloted by the Government with six pilots underway across various departments. We at Landseer Partners have been extensively involved with one of these pilots. Also, we have discussed the emerging characteristics with service providers participating in other lean procurements.

Although it is early days, there are some emerging trends that the Government and bidders would do well to take on board for lean procurements to become successful and ubiquitous across government.

So, what are these emerging trends? Our “early bird” experience of being on a lean procurement pilot suggests that:

·         Lean procurements, by their very nature in attempting to reduce the overall procurement timeline significantly, have the potential benefit of reducing bidders’ costs. They also have the potential to reduce the opportunity to discuss in sufficient detail important commercials such as contract schedules and contractual terms and conditions.

·         Both the client and potential suppliers need to plan and resource better a lean, competitive dialogue. That means supplier submissions need to be submitted much sooner than in previous procurements. It also means that client bid reviews and quality assurance need to be undertaken much quicker and more efficiently.

·         There is an even greater need for strong leadership and decision-making on both the client and supplier side i.e. the need for empowered individuals is greater in lean procurements than in a traditional competitive dialogue. Decisions need to be taken swiftly in order to maintain pace in the procurement.

·         Stress levels for all parties can be high. All parties will be “doing more” in “less time” – so outcomes need to be kept in perspective with a view to the quality of deliverables/schedules not being compromised and

·         Bid teams need to be better resourced at the outset, especially in terms of having the right subject matter experts being available at the appropriate time. This seems to be especially so in the case of lean dialogue.

Finally, our experience, short though it is, suggests that incumbent suppliers, by virtue of their incumbent status, have a slight advantage over other short-listed competitors. They have greater knowledge of the existing services supplied. They need less time in the “data room” and are often able to provide a greater level of detail in their dialogue responses, simply by virtue of knowing the service in greater detail.

In summary, it is still very early days in the lean procurement world.  The obvious benefits of shorter procurement times (and hence reduced costs on all sides) though welcome, might actually mask additional costs that could subsequently emerge.  

Landseer Partners     http://www.landseerpartners.com/

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