1583 – Procurement Strategy with K. Wright Consultancy’s Keith Wright

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0:58with us right now it's keith right keith you are the managing director and founder of k right consultancy you are a procurement expert and business consultant you're found on the web at k right consultancy.co.uk that's the the letter k and then right is w r i g h t uh all right well So Keith, it's great to have you. Hi, how are you? Excellent, excellent. Well, give us an overview of like what you do in procurement. And let's start off with some kind of basic definitions and then certainly, you know, where you are in the world. Yeah, yeah, sure. Yeah, it's funny because I talk to people a lot about procurement and often it's, what's procurement?

1:40What is that all about? But I often liken it to most people in the world buy stuff. Pretty much everybody buys stuff. And if you think about where that stuff comes from, how it turns up where the supply chain management someone's ordered it someone's placed it in the shop or in a warehouse and it's turned up and often that that goes right back through from somebody making it in a manufacturing plant somewhere in the world and bringing it right through to ultimately the consumer that uses that product so procurement is effectively that end-to-end proposition if you like you know choosing what you buy how you buy it what you sell it for what you pay for it, which suppliers you use, what brand you have, what packaging it comes in, what supply chain management you have, all of those things come under the umbrella of procurement.

2:27So you can't sell stuff without buying it from somewhere, which is where procurement comes in. Yeah. And at some point, you know, in terms of like the stage of a business, procurement, it's a big deal, right? And how you do it. And certainly if you make mistakes in this, I mean, it can really cause big problems. You know, if you don't have raw materials, if you don't have, you know, the support systems in place, right? Or there's just, you're off on the timing. Like you, you know, think of like on a small scale, you know, just to help maybe like someone who's a consumer think about this. Like you could put stuff on Amazon AutoShip, right?

3:10And, you know, if you run into a situation where you're getting that product way too often, well, that's no good. You don't want to spend that money and just have that stuff sitting on your shelf. You want someone else to warehouse that for you. So you don't have to buy it if you're not going to be using it. And then similarly, you certainly don't want to be in a position where if you're like, hey, you know, I need, you know, fertilizer for the plants or something like that. because that fertilizer hasn't come in and it's been three weeks now. And, you know, we forgot to order that, which you don't want to do like, and correct me if I'm wrong, but like, again, it's about right fit, right size, you know, timing everything, right?

3:47Like that's a part of it logistically, right? To make sure that the wheels of operation move smoothly. Yeah, absolutely. Well, I mean, a classic example, right? You're let's say you're selling, you're having a promotion. if your procurement team hasn't had a conversation with its supply partners and somebody goes and sells you know 50 more stuff and you've got a forecast that's 10 more stuff guess what you know you're going to have disappointed customers you're going to have empty shelves in your stores in your branches online and nobody wants unhappy customers right unhappy customers leads to unhappy teams which therefore you know all impacts the customer service there's nothing like a happy member of a team service and a happy customer that's coming back because you've delighted them with your customer service proposition.

4:35And that's the magic ingredient. Get that right. Your life's so much easier in terms of time, money, and resource. Get it wrong, and that's a whole world of pain. Letter to the CEO with customer complaints and refund demands and all sorts of problems. And that's not good for your reputation as a business. Yes. As let's say there's someone's listening and they're with an SMB and they're like, well, you know, we really don't worry about that so much at this stage. Why should they pay attention to how and why procurement works, particularly if they ever fancy themselves in doing business with midsize and enterprise level companies who do have to worry about procurement?

5:14Why do we need to be able to speak the language and what should we know about that? yeah i think it's it's interesting because um this this can really trip you up it can trip you up in you know most business owners i'm guessing at some stage will want to to sell or continue to grow or refinance and some of this stuff is really good sensible business practice and process management and and actually risk mitigation so it's almost borderline negligent to ignore supply chain management because you know ultimately if you've got the right processes and policies in place and systems you're making your life easier and actually any any investor looks at a business and says their supply chain management looks a bit flaky potentially you know the valuation of that company suddenly drops because you know you've you haven't got the right due processes in place.

6:11And, you know, it doesn't have to be, you know, super, super intensive, you know, actually having some really simple practices about who your key supply partners are, who do you contact? Have you got a service level agreement that talks about the things you expect, whether it's, you know, sales teams, marketing support, digital presence, you know, there's all sorts of things you can put in place to professionalize what you do as a business. And that's, I think that professional term often, you know, it's talked about in sports a lot, you know, in coaches and those sorts of things, but actually within a business, how do you professionalize what you do so that it's really robust, not for the sake of it, but actually to make sure your business serves its customers in the absolute best possible way.

6:56Yeah. Keith, explain what you do and why a company might want to engage with you, you know, and I'm thinking about why can't they do this themselves? Well, do you know what? I mean, I've been doing this for about 30 years. So I'd like to think I've got a little bit of professionalism when it comes to procurement. So I think often it's time management. So I work with a lot of business owners, a lot of entrepreneurs that have got some amazing business acumen when it comes to sales and customer engagement and all the exciting stuff of sales management. But often it's the time, A, to step back and look at this particular aspect, and then B, knowing what to look for.

7:42And I think that's where, you know, somebody that's done it for a living and as a career, the things I can identify with my systems, with my approach that I've done, tried and tested again with lots and lots of different businesses and lots of different sectors, you know, I can actually get to a result probably far quicker with my approach than if you tried to do it yourself. Actually, yeah, you concentrate on growing your business and let me come in and work with your teams and identify where these areas of opportunity are. Is it possible to over-manage and over-analyze? I was just kind of thinking about this on the logistical, the procurement size.

8:22Have you ever gone in like, whoa, whoa, whoa, you guys, this is overkill. You're allocating way too many resources toward this. Is that possible? It's probably rare. I would say, if anything, it's under-resourced. I think the bit you can do, and I've always used the term pragmatism a lot in business, is you can overanalyze potentially where you think you need to have an impact. So by that, take Pareto, 80-20. generally speaking you know most organizations will have a core set of products of services of suppliers that if you get those right and spend the time and energy on those things they make a material impact on the sales or profitability of the organization and there's always a tale whenever i've gone into business there's potentially hundreds if not thousands of suppliers that do small parts and small deliveries for businesses that actually collectively make a difference, but individually, they're very small.

9:25So I think that's the bit to watch is don't try and don't try and do everything because actually it's a law of diminishing returns. Yeah, sure, sure. As someone, let's say someone has kind of come up, they started an SMB, started growing scaling, they're now seeing that this is getting a little, like there's a lot going on. What would be some of those initial KPIs that you think are going to be pretty valuable data points when we think about anything that might fall into the procurement bucket? Yeah. Yeah. Well, I mean, I've produced a scorecard actually that enables a business. It's about nine questions.

10:07And it answers things like, have you got contracts? Really basic, right have you written down the terms of how you do business um have you got some service level agreements and i mentioned that already in the discussion have you got some objectives together doesn't have to be hundreds but what are the two three things that you want to deliver in terms of that space and i mentioned earlier about promotion you know most businesses will probably want to grow therefore have you articulated what your growth plan is and made sure that is firmed up with your supply base because otherwise guess what you're going to be in the queue you know the person that's been really proactive and got in front of their supply base and sold you know their principles of what they want to do as a business they're the ones that are going to be you know front and sender you know we people deal with people if you're a business that's growing who wouldn't want a piece of that right if you're going to be buying more from your supply base that's going to in turn help them so i think some of those kpis around availability service you know we talked about the importance of the customer and how you know ultimately it's all about service and the needs of the customers have been really clear on the expectations of service performance, targets, objectives, who you meet, where you meet, you know, holding people to account.

11:23If we say we're going to do this, who's going to do it, when you're going to do it by. So it's all about that, again, that term professionalism to make sure that, yeah, you're really delivering on these things as a collaborative approach with your supply base. Yeah. And your website is kwrightconsultancy.co.uk. You'd mentioned checklist. I don't know if that's available to share or is that something that you just kind of use to go through with folks? But are there any resources or maybe, you know, maybe long form content or, you know, just something that might be a great next step for someone that's been listening to our conversation?

12:01yeah there's there's two i mean if you visit the website it's it's a little bit annoying if you've been a few times but it pops up first thing you'll see is take take the free scorecard you know pop an email address in and you can immediately take the scorecard um i'm pretty prolific on linkedin so you know i love i love producing articles um i've just uh i've just written a book that's due to be published later in the year but for now probably my linkedin profile there's a lot of published data in there. I write a lot about procurement, a lot of hints, a lot of tips. I've been published in quite a few articles across various different publications.

12:35So the LinkedIn profile is probably the one that you can get a lot of free content. I'm really passionate about sharing this topic and giving out hopefully good hints and tips to my network. And regarding someone that may have, maybe they search you, they found this podcast or listening to the conversation. Who are the folks out there that probably really should reach out and grab a conversation? Like, I don't know if it's, maybe there's some pain points that they might be experiencing. They don't know that it's actually a procurement issue, but how might they know that, yeah, the time is nigh.

13:17They need to at least start having those conversations with you. Yeah, I think it's someone that probably owns a budget and either owns a business or runs a function. So my typical client, I've worked with procurement, heads of procurement, chief purchasing officers. I've worked with CFOs. I've worked with CEOs. I've worked with managing directors. I've worked with private equity backed kind of businesses that are really interested in looking at the investment. So it's really anybody that has, I would say, understands the customer proposition of their business and is maybe concerned that I would say that they're spotting some issues.

13:58So communication might be amiss. They might be getting customer complaints and not quite understand why. It could be quality. They could have stockouts in their business. They might be seeing inflation, right? Inflation's mega, particularly here in the UK where I'm based and inflation still running a market, another Bank of England interest rate hike today. So inflation is a challenge, but with a procurement strategy, you can deal with that by having robust, open conversations with your supply base. So actually being on top of that enables you to, you know, manage that inflation line and actually, you know, be more competitive again for your customer base.

14:35So there's quite a few things often, you know, when you ball them down, like most things in life, there's probably two or three things, you know, that complexity, consistency, customer service that probably bubble up to the surface as saying, you know, those are the things that you would identify. Yeah. All right. So your website again, Keith, is kwrightconsultancy.co.uk. What do they click on when they go there? Oh, I see a schedule box at the bottom. Oh, it looks like you do free introductory calls. Yeah, yeah, they can book straight into Calendly. So I'm delighted to talk to people. Sometimes, you know, in this wonderful world of networking, you know, I have lots of conversations.

15:20I'm talking to people every day. I had a really cool conversation with somebody in Nigeria today that was talking about a really smart innovation in terms of air quality. And I thought, wow, that's amazing. It's not even in the UK yet. So yes, definitely conversations with people about how you can connect. You never know having a brief conversation what doors that may open either way in the future. And it's really cool meeting people and having those types of stuff. All right, Keith Wright, again, procurement expert, business consultant and managing director and founder of K-Wright Consultancy found on the web at kwrightconsultancy.co.uk to our friend that's listening.

15:58Just click, try to find the show notes. We've got a direct link, Keith, to your website. It's been a pleasure. Thank you so much for joining us. Thank you, Josh. Pleasure.

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