Last month the British Standards Institution (BSI) launched their new standard, PAS 7000:2014, Supply Chain Risk Management - Supplier Prequalification. This new standard focuses on creating a universally applicable supply chain information standard aimed at establishing the Governance, Risk and Capability (GRC) of supply chain relationships. It is a generic model that can be used within any organisation, within any sector and of any size.
The main benefits of implementing this standard for both suppliers and buyers are:
- Provides consistency in procurement approach
- Saves time and resource by not having to produce lengthy tender documentation
- Covers a wide range of topic areas
- Reduces duplication in tender applications
- Saves time through standardised approach
- Demonstrates the supplier has a clear and robust procurement process
- Provides a clear model for where businesses need to improve in order to be procured
It aims to capture all of the essential pre-qualifying information without fuss and effectively sets a minimum benchmark that all companies (large or small) would need to meet to become a supplier. All good stuff so far and who could argue with the logic? But what are we all going to do with all of that spare time we have as a result? Here are some choices you have whether you are the buyer (client) or the supplier:
- Issue/reply to more tenders (but will that improve quality?)
- Reduce procurement costs/tender overhead (smaller teams?)
- Improve the quality of the pricing documents/tender response (do you know how?)
- Clarify/understand the riskbetter (critical to the price?)
- Spend more time on the highest value generating elements of the tender/response (tempting to carry on as before?)
Surely, the last point must be the most critical for the buyer and the supplier. If you have a sizeable tender then it is not only about winning it, but ultimately about extracting the value from the resultant contract by satisfying the customer's needs and making a reasonable margin; where possible for many years to come. Buyers and suppliers are mutually dependant upon each other for success but there seem to be too many obstacles to simply get to know each other and decide if you can do good business together. I have many clients who find that the rigours demanded of the tender process often get them the "wrong result" even though the process has been followed to the letter.
It seems to me that if you want to get real value from PAS7000, spend the time you save actually getting to know and understand your future business partners because that is where the real value rests. If the pre-qualification is seen as a bureaucratic hurdle to clear, then surely the most valuable part of the process must be the buyer and supplier getting to know each other as future business partners.
by Paul Wilson
Managing Director at Provelio
| 25/11/2014 08:45 |comments powered by Disqus