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The procurement strategy that fits on one page

Een geplastificeerd A4-vel hangt met een klem aan het hekwerk van een machine; op de achtergrond loopt een medewerker door de productiehal

A long strategy is usually not a thorough strategy. It is a strategy in which the choices have been postponed.

Strategies don’t get long because there is so much to say; they get long because too few choices are made. Every department wants to see its priority reflected. Every risk has to be mentioned. Every ambition gets a paragraph. The result is a document in which everything is important, and therefore nothing is. Length feels like thoroughness, but it is often the opposite: postponed choices.

One page is not a summary

A strategy on one page is not the short version of the long document. It is a different kind of document.

A summary leaves out what is less important. A strategy on one page forces you to decide what does not go in. That turns the constraint into a tool: anything that does not fit clearly on the page has usually not been properly thought through yet.

What goes on the page

There is no fixed format. But in the strongest procurement functions I see, the page always answers the same five questions.

  • What are the objectives? In one sentence: what does procurement need to deliver for this organisation in the coming years?
  • What mandate does procurement have? For which spend, risks and decisions does procurement have a seat at the table, and from what point?
  • How do we approach our categories? Which are strategic, and which mainly need to be efficient?
  • How much attention does each supplier get? With whom do we build a relationship, and whom do we assess on performance alone?
  • What do we not do? The choices we deliberately leave aside.

The next sections go through those questions one by one.

Objectives

The first line of the strategy is the hardest, because it determines the rest. “Reducing costs” is not an answer; that applies to every department. The question is what this organisation specifically needs from procurement.

For a manufacturer that depends on a handful of critical components, that is security of supply. For an organisation with fast-growing software spend, it is control over contracts and licences. For a company that falls under new European reporting obligations, it is insight into the supply chain. The answer differs per organisation, and that is exactly why it has to be on the page.

Mandate

In practice, this is the part that makes the most difference, and the one most often missing.

Set out from what amount, with which type of dependency or at which level of risk procurement is involved. And above all: from what moment. Not “at the contracting stage”, but “before anyone talks to a supplier”. That one short sentence prevents more problems than an entire chapter of procurement policy.

It is just as important to set out where procurement does not step in. Small, one-off purchases with little risk don’t need to go through a process. Making that explicit earns trust with the rest of the organisation, and leaves time for what matters.

Categories

Not every category deserves the same attention. Peter Kraljic’s well-known model helps here: it plots categories against their financial impact and their supply risk, and shows where you need to work strategically and where you mainly need to buy efficiently.

The model does not need to be drawn out on the page. What does need to be there: which three to five categories are strategic for this organisation, and what that means for the approach. A critical component with only one possible supplier calls for something different from office supplies.

Attention

With most suppliers you have a transaction. With a few you have a relationship, or should have.

The one-page strategy makes clear which suppliers fall into which group, and what that means. With strategic suppliers you hold a regular conversation about performance, development and risks. For the rest, monitoring whether agreements are kept is enough. Without that distinction, the suppliers causing the most problems get the most attention, and things go wrong with exactly the suppliers you can least afford to lose.

What you don’t do

The last line is the most underestimated. A strategy only really becomes a strategy at the moment you write down what you are leaving aside.

For example: this year we will not centralise indirect procurement. We will not select a new procurement system until the data is in order. We will not start a supplier programme for categories below a certain amount. Sentences like these feel uncomfortable. They are also exactly what gives a team something to hold on to when a new request comes in halfway through the year.

Why a clear design changes behaviour

People adapt quickly to the structure they work in. When it is clear where procurement steps in, colleagues know when to come knocking. When it is clear which categories are strategic, buyers know where their time should go. And when it is clear what will not happen, the discussions that come back every quarter disappear.

That is the real value of one page. Not that it is short, but that it is usable at the moment a choice has to be made.

The test: can your team retell it?

There is a simple way to test whether your strategy works. Ask three people from your team, separately, to explain in two minutes what procurement is steering towards this year.

If the answers are similar, you have a strategy. If they diverge, you have a document.

How to make the page

You don’t need to turn it into a months-long project. An afternoon with the right people is often enough for a first version.

  • Start with the spend, not the ambitions. Where does the money go, and where are the dependencies?
  • Answer the five questions in no more than three sentences each. Whatever doesn’t fit in three sentences hasn’t been decided yet.
  • Put the page to the board and to two departments procurement works closely with. And ask for their comments.
  • Hang it up where it is used. And look at it every quarter, not just during annual planning.

Conclusion

A good procurement strategy doesn’t have to be long to achieve its purpose. It does contain clear choices: where procurement steps in, which categories matter, how suppliers are managed and what deliberately does not happen. If that doesn’t fit on one page, it is usually not a sign of complexity, but of choices that have not yet been made.

So don’t start by writing; start by cutting. What remains is your strategy.

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WRITTEN BY
Maarten Smits van Oyen
Consultant — permanent & interim

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