5S Techniques can be effectively applied to Procurement
April 4, 2012 Leave a comment
After a number of Procurement System Reviews performed by Calyptus Consulting Group in the last six months and witnessing how many public sector companies (both large and small) struggle to standardize their work through policies and procedures to be compliant with the Government requirements, it is hard not to notice an overarching rule:
If a company relies on written policies and procedures that are collecting dust on the bookshelf and has no mechanism for ongoing accountability – the procurement process is not sustainable, and its deterioration becomes inevitable. All the deviations from the standardized work have to be corrected as soon as they appear because allowing a staff member to ignore a requirement is a signal to all others that that kind of behavior is acceptable. From that point on, you can only expect things to get worse.
Yes, the theory of broken windows applies to procurement just as it does in criminology. The theory was published in a 1982 article by social scientists James Q. Wilson and George L. Kelling. The essence of the theory can be summarized in the following observation from the article:
“If a window on a building is broken and is left unrepaired, all the rest of the windows will soon be broken. This is as true in nice neighborhoods as in run-down ones. Window-breaking does not necessarily occur on a large scale because some areas are inhabited by determined window-breakers whereas others are populated by window-lovers; rather, one unrepaired broken window is a signal that no one cares, and so breaking more windows costs nothing. (It has always been fun.)”
This sociological phenomenon is the foundation of Quality Improvement methods like 5S. 5S is a Lean tool focused on creating and maintaining the workplace in order to reduce waste. The last and arguably the most important step of 5S is “Sustain” which is focused on maintaining the new way of work and not allowing a gradual decline back to the old ways.
The “Sustain” phase is usually the hardest part to implement because it is long term and it requires resources. Even very large and very well organized public sector companies with best practice policies and procedures tend to overlook the importance of the process sustainability.
A word of advice for procurement managers: If you see a procurement file without price analysis or a sole source purchase with vague justification, point that out to your procurement staff, because by not reacting you are encouraging that kind of behavior. And if you let it go, do not expect things to get any better!