Debunking Procurement Myths: What People Get Wrong

Is there any aspect of an organizational process procurement doesn't impact?

“None” I am quite certain you will agree.

However, there are a number of myths and misconceptions surrounding procurement that can create confusion, undermine efficiency and even result in missed opportunities.

In this blog post, we'll debunk some of the most common procurement myths and provide tips for procurement leaders to apply in their day-to-day work.

🔔 Myth #1: Procurement is Just About Getting the Cheapest Price: A procurement team might be tempted to choose a supplier offering the lowest price for raw materials. However, this vendor might have a history of delayed deliveries or unreliable product quality. Over time, these delays lead to production stoppages, causing more losses than the money saved on the initial price.

Tip: When evaluating suppliers, implement a comprehensive vendor evaluation process that includes factors such as supplier reliability, product quality and customer service, in addition to price. This will help you make more informed decisions that lead to greater long-term value.

🔔 Myth #2: Procurement Is Just a Paperwork Task: A procurement professional might be viewed by other departments as someone who simply processes purchase orders or manages invoices. However, procurement is often the key department responsible for cost management, sustainability efforts and establishing long-term partnerships with suppliers that help companies achieve their strategic goals.

Tip: To raise awareness of procurement’s strategic role, be proactive in engaging with other departments, sharing insights on cost-saving opportunities, sustainability and risk management, and demonstrating how procurement impacts overall business success.

🔔 Myth #3: Procurement Has No Influence on Company Culture: A company committed to sustainability might be unknowingly sourcing materials from a supplier that uses unethical labor practices or has a high environmental footprint. This not only harms the company’s reputation but also goes against its cultural values.

Tip: Ensure that supplier selection processes are aligned with your company’s values. Use criteria such as environmental impact, ethical labor practices and social responsibility when evaluating potential vendors. This can strengthen your company’s reputation and reinforce its cultural values.

🔔 Myth #4: All Procurement Technologies Are the Same: A mid-sized company might decide to invest in a high-end procurement software solution that’s tailored to large enterprises. The complexity of the system, combined with the organization’s smaller scale, leads to inefficiencies and underutilization of the platform.

Tip: When selecting procurement technology, ensure that it aligns with your organization's size, needs and budget. Start by identifying key features you require (e.g., supplier management, contract lifecycle management, or purchase order automation) and choose software that addresses those needs while being scalable for future growth.

🔔 Myth #5: Procurement Should Be Done In Isolation: A procurement team might go ahead with a supplier selection without consulting the technical or legal departments. This results in an agreement that is technically unviable or legally problematic, causing delays and additional costs down the line.

Tip: Develop cross-functional collaboration strategies that involve key stakeholders throughout the procurement process. Regular meetings and open lines of communication between procurement, technical, finance, legal and other departments can help align objectives and reduce misunderstanding.

🔔 Myth #6: The Procurement Process Is Always Slow and Complicated: A company might struggle with long procurement cycles due to manual approval processes or reliance on outdated systems. This leads to delayed orders and impacts the company’s ability to meet deadlines.

Tip: Invest in automation tools, such as eProcurement platforms or digital contract management systems, to speed up procurement processes. Streamlining workflows, setting clear approval hierarchies and integrating systems across departments can help you reduce inefficiencies.

What myths have you encountered in your procurement career? How did you overcome them? Share your experiences with us!

PS: Join me on 17th April for a Live Question/Answer Session on Procurement Challenges. Do you have a sticky issue you need help resolving? Comment here or send a DM. Click the link to register and don’t forget to save the date in your calendar!