The New 5 Rights of Procurement – The Hughes Model

The New 5 Rights of Procurement – The Hughes Model

The basic fundamentals of Procurement have been embedded in the traditional 5 rights model, and have stood the test of time over many years, and are still relevant today.  Right Quality, Right Quantity, Right Place, Right Time and Right Price.

 However, given the back-cloth of Covid, Brexit and the US China Trade tensions, I recommend a complement to these with an additional framework for review, deep-dive analysis, and ongoing design, and development, of existing and future Supply Chain, Networks.  This to not only identify and mitigate risk,  and facilitate continuous improvement, but provide companies with long-term sustainable competitive advantages.

These are the New 5 Rights, The Hughes Model.

These 5 rights are Responsibility, Relationships, Risk, Resilience and Results.

As with many things, where there is risk and turbulence there is also OPPORTUNITY

Responsibility – In terms of Ethics, CSR and Governance.

This is an opportunity to review supply chains based on Ethics, Ethical Procurement, CSR and sustainability in terms of Profit, Planet, People and Corporate Governance.

With Covid 19 single use PPE is now Polluting Planet Earth. If one single-use face mask is worn by one person each day for a year, it will have created 66,000 tonnes of contaminated plastic waste. None of it recyclable.

Relationships

We need to align the supply base to meet the needs of the business operationally and strategically.  We can use Category Management to as a tool and vehicle to provide Competitive Advantages.  Supplier Reduction Programmes. Etc.   This can be really important for the Public Sector who in part, due to now historic EU regulations,  are playing catch-up.

Risk – Identification and Mitigation

Do we have the right sourcing strategies in place, locally and globally.  Can Augmented Intelligence and Big Data be used to support the analysis.

Resilience 

How prepared are we for Supply Chain Disruption and how quickly can we recover.  See above.

Results 

Not only Financial metrics, but to include measurements relating to CSR, Ethical Procurement, Sustainability and Governance.  We can use Balanced Scorecards for this.

Supply chain networks are forever in flux in an ever changing environment.  Today, Covid 19, Brexit and US Trade Wars.  Tomorrow it will be something else.



Author: Billy Hughes
World Class Procurement, SCM & Negotiation consultant, trainer, tutor (CIPS), course developer and experienced college lecturer and SQA Qualifications Verifier (SCM) founded on more than twenty years practical hands-on leadership experience and expertise gained in the global high-tech Electronic Manufacturing Services industry and Public Sector working with and for international market leaders on a global reach.

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