The just-released Office of the Auditor General (OAG) Report on Strategic Suppliers goes some way to addressing serious issues, writes Jennie Vickers of Zeopard Consulting, but not far enough.
This article is part of our spotlight on New Zealand Government Procurement
There is an old Maori Proverb along the lines of “to build trust and long-lasting relationships, you need to drink 1,000 cups of tea together”.
While it seems a decade ago, I spent substantial time during lockdown having virtual tea, connecting businesses with businesses and Government and, most frustratingly, connecting people in government agencies with people in other government agencies – and even with people in their own agencies.
The recent OAG report Strategic Suppliers: Understanding and managing the risks of service disruption brought flooding back memories of the exasperation I felt daily during lockdown over the proliferation of excel spreadsheets – within agencies and across agencies – for the recording of data on supplier capability, capacity and inventory. These spreadsheets became the place where SME innovation and solutions went to die.
At the same time, the most useful data gathering was being done by industry associations who were not being paid to do it. Talking weekly to other business associations, I discovered they shared my frustration that there was no one person or agency tasked with linkages on supply chain.
Against this background, the OAG report is a compelling and uncomfortable read regardless of your role in supply chains.
“the most useful data gathering was being done by industry associations who were not being paid to do it. Talking weekly to other business associations, I discovered they shared my frustration that there was no one person or agency tasked with linkages on supply chain.”Jennie Vickers, Zeopard Consulting.
Do we need more or different action than that recommended by OAG? Yes. My additional recommendations would be:
- Tolerating a rubbish-in rubbish-out approach to data has got to stop. Ban excel spreadsheets. Other Microsoft products (like Dynamics, PowerBI, M365) are readily accessible by public servants;
- Pay serious attention to educating public servants about business. Supplier Relationship Management (SRM) requires customers to stand in the shoes of their suppliers and really understand how industry actually works. Many people in procurement have never worked in the private sector, so why expect them to understand;
- Ensure that strategic suppliers receive sufficient volumes of work (and therefore revenue) to warrant the demands for exceptional attention in times of strife;
- Give MBIE power to move out poor performers in Agencies. Giving MBIE ProcurementNZ more work to do, without more power is not a solution, it merely creates the terms of reference for the next inquiry;
- We need OAG enquiry to look at the gaps between the Rules and issued RfXs. Two years on and SMEs are still locked out. Broader Outcomes are not evident in enough procurements and must be lying on the procurement plan cutting room floor;
- Ensure CEOs of agencies are not placing pressure on procurement teams to keep cutting costs. Doing so makes it impossible for any real change to materialise; and
- Identify NZ SMEs which could be suppliers of strategic goods and services, but which do not have the scale to pass “the big must be best” criteria. Give them real contracts, so these guys are ready and resourced to provide extra capacity, when the next one hits.
An Agency full of super connectors might be needed until those 1,000 cups of tea have been drunk by everyone involved. Of course, Government needs to budget for those cups of tea and to remind public servants that the conflicts of interest rules actually support tea drinking for trust building!