In the current economic situation, with many sector-specific, national and global challenges faced by companies, the desire to keep budgets tight and spending lean has heightened. Yet, it is this exact scenario which can see procurement teams becoming blinkered – overlooking all of the other equally important considerations which are impacted by their decisions.
A strong strategy enforced right across the business not only ensures that the financial outcome is favourable, but also has a fundamental effect on the safety of customers, and the security and long-term sustainability of the organisation as a whole.
Mitigating safety risks
Mitigating risk is a core component of any business strategy, and that simply cannot be done without having a complete and constant oversight of the products (both food and non-food) being used across every site and within each department. There are specific considerations within individual sectors, such as care facilities where dehydration and malnutrition are particular risks. But there are commonalities too: any business which serves food, from schools to hotels, must adhere to strict allergy policies, while cleaning products and waste removal services must be tightly controlled to avoid harm to customers and staff.
All of these factors are business-critical: the safety of customers is directly linked to the company’s ability to continue functioning successfully. Yet all too often we are seeing real-life examples of policies being flouted, with individuals or teams circumnavigating procedures and sometimes even obtaining products directly rather than through their procurement department.
The consequences of this can be disastrous, and that is not a hyperbolic statement. A scenario where a chef in a residential care facility goes to buy ingredients for an upcoming meal at the local supermarket may seem to a layperson like an inconsequential decision. But in reality, this situation causes a much higher chance of someone being served a meal which does not comply with their dietary requirements – and if that involves a serious allergy, then this really is a matter of life or death.
Operating within boundaries
There are a whole host of reasons why a staff member or team might take that chance. It could be that the supply chain has not been optimised fully, meaning missing ingredients, delayed deliveries, or sub-standard quality. This leaves staff with a difficult choice, and securing their own ingredients may well seem like a logical solution – but, of course, when we factor in the risks involved, it really is not the right answer.
It may be a lack of training: if individuals do not fully understand the risks, and the resulting responsibility on their shoulders, then it becomes easier for them to justify operating outside the boundaries of the company’s procurement strategy. It’s highly doubtful that anyone who fully understands the risks, and is fully trained on the ins and outs of their company’s strict framework, would take that chance anyway – especially given the implications for them as individuals as well as the wider impact on the business.
So, how do procurement leaders avoid this situation occurring? There are a number of steps which must be taken and, while this process of gaining control often will result in cost savings (or at the very least a reassurance that value for money is being achieved), this must not be the only intended outcome.
Gaining control
Regularly reviewing procurement strategy and frameworks is essential, especially at a time when emerging technologies are resulting in an ever-changing operational environment. Strategies must be comprehensive, and they must work well in practice – not just in theory. Teams must understand what the boundaries are and, most importantly, they must be able to work successfully within them. If the rules look good on paper, but don’t translate in the ‘real world’, then it is time to go back to the drawing board.
Each staff member must understand fully what the implications for operating outside of these boundaries are – for them, but also for customers, and for the business as a whole. The responsibility of ensuring safety for individuals and long-term sustainability for the company lies with every person, not just the procurement team or senior leaders, and that message must be clear to all.
Implementing training and regular process reviews ensures potential issues can be identified and addressed early on, and ensures that ‘I didn’t know’ can never be used as an excuse for operating outside of the rules. And, of course, the supply chain itself must be optimised to ensure that scenarios where essential products are not available for use are not commonplace – with back-up plans ready to instigate should there be an urgent issue needing a resolution.
A risk never worth taking
Costs matter, but the efforts taken by procurement teams to drive down spending and maximise value for money are frankly in vain if their colleagues responsible for meal preparation or cleaning, for example, are taking huge risks which threaten to undermine the reputation, accreditation and future of the business. Or, even worse, could pose a safety concern to those around them.
Every decision taken has a direct impact on the health and safety of others, and that’s why gaining control of each aspect of the procurement process is essential work for every company. Without oversight, stringent boundaries, secure supply chains, and staff training all being in place, the chance of an uninformed or ill-advised decision having huge consequences is so much higher. And that is why procurement processes are not simply cost-saving exercises, they are critical to safeguarding your customers, your staff and your business.