What is agile procurement?

agility, agile
January 17th, 2019
Share :
{{totalComments}} comments

Agility is often considered to involve taking a proactive, diverse and adaptable approach. But what does it really mean for purchasing departments? How is agility possible when well-established rules and processes are already in place?

Defining "agile"

The Oxford English Dictionary defines "agile" as follows:

  • The ability to move quickly and easily.
  •  The ability to think and understand quickly.
  • Relating to a method of project management, used especially for software development, which is characterised by the division of tasks into short phases of work and frequent reassessment and adaptation of plans.

Meanwhile, the following definition, provided by Ardent Partners in its CPO Rising 2015 report, can be used to apply the agile concept to procurement: “The procurement teams that adeptly connect their tools, resources, and expertise to support the evolving needs of the business will succeed above all others. Agility will define the next wave of procurement success.”

The characteristics of an agile purchasing department 

Agile purchasing departments display three main characteristics that combine anticipation, flexibility and team spirit:

  • Solving problems at the source 

Agile purchasing departments solve problems by targeting the source of the issue, while also meeting business needs. In other words, they take a proactive approach rather than a reactive one. This requires a thorough understanding of both market and stakeholder requirements.

  • Being flexible

Agile purchasing departments are able to adapt to any change (such as strategy, location and regulations) and react quickly. To do this, real-time visibility and collaborative tools are essential.

  • Drawing on collective wisdom

An agile purchasing department is a team that makes full use of everyone's strengths to become more efficient and be able to identify new opportunities.

Two concrete examples of agile procurement

Procurement Leaders suggests two good practices to enable purchasing departments to improve their agility:

  • Negotiate the contract during the sourcing process

When purchasing departments are selecting their suppliers, they can discuss the terms and conditions of any potential contracts in advance. This allows them to anticipate any requirements and avoid any unwanted surprises or delays.

  • Eliminate anything that will not affect the outcome

Every step of each procurement process needs to be reassessed to focus on the essentials. Agility requires common sense and a level of context sensitivity. Less is more! Both speed and the lean (1) method are more in-line with agility than standardised or comprehensive processes.

Above all, becoming agile means being more flexible. It is not a question of replacing every process with agile equivalents, but rather reassessing current operations as and when necessary in order to be more efficient and effective.

 

1: Management technique to make production more cost-effective without sacrificing quality.