Five ways social landlords can be better at procurement
Get influence at board level
In the social housing sector, procurement has long been seen as that little team you go to when a new photocopier or more kitchen units are needed. But increasingly the strategic contribution that procurement can offer to housing organisations – beyond the day-to-day sourcing of goods and services – is being recognised.
Finding a procurement champion at the highest level of your organisation is key to gaining this recognition. One way to do this is by talking the language of senior colleagues and showing how purchasing can help with their individual agendas. For example, demonstrate how procurement can reduce repairs costs by giving the maintenance team a clearer idea of exactly where their money is being spent . Help to boost customer service standards by managing tenant-facing suppliers more effectively. Or support the social investment team by weaving community value clauses into supplier contracts.
Go beyond a policing role
Social landlord procurers are usually responsible for making sure their organisation complies with public purchasing laws. Unfortunately, this task has earned buyer’s a negative reputation, branding us as the procurement police who slap people’s wrists if they buy outside contracts.
To combat this, procurement officers must persuade their colleagues of the value that comes with co-ordinating buying centrally rather than using favourite suppliers. Educate others on the legal pitfalls of rogue spending but also show colleagues the savings they can make when purchasing from agreed frameworks.
We also need to ensure that procurement isn’t seen purely as the custodian of financial regulations. The purchasing team has a unique vantage point and the commercial understanding it can provide could increase income, boost innovation and cut costs. Purchasers must get better at internal PR
Embrace technology
Compared to our private sector counterparts, buyers in social housing are way behind when it comes to digital procurement. E-purchasing and online tendering may be widely used and have their place when used correctly. However, it’s the more strategic buying technologies that many providers are not embracing. Things such as predictive procurement, smart data and real-time collaboration could all help social landlords to better forecast demand for certain goods and coordinate supply chains more efficiently right across their business so bigger savings can be made. Procurement technology could also help landlords build up a database of market intelligence to inform future buying decisions, rather than relying on suppliers for information.
Create good relationships with suppliers
Focusing on price above everything else can actually be counter-productive. Squeezing the supply chain to eat away at its margins may achieve big savings in the short term. However, the result is often unhappy contractors, inferior services and future problems such as an increased risk of legal disputes where suppliers exploit their position after being forced to concede low prices.
A more sustainable way of generating savings and increasing quality is to spend time developing lasting, mutually beneficial relationships with suppliers – something that often leads to fresh ideas and creative new ways to cut costs.
One area where this can have a positive impact is customer experience. Lots of housing organisations provide tenant-facing support through suppliers, such as contractors doing repairs. It’s vital that these suppliers provide the high level of service that the landlord itself would offer so residents see no dip in standards. That’s why the role of the procurement team in carefully managing supplier relationships is so vital – not just to customer service but to a range of work areas in housing organisations.
Recruit purchasing leaders with the right values
Procurement success in housing organisations often comes from having the right leader and there are a number of organisations leading the way. The pace of change around purchasing is much faster in the private sector with buying functions having a higher profile than they do in social housing.
Procurement leaders with experience of influencing a whole business are more likely to be able to change the perception of purchasing across a housing provider. This often means that the best housing procurement leaders have experience in other sectors. High-ranking status must also be given to purchasing heads so they are listened to at the top level and have the confidence and the mandate to drive change through.
John Wallace is head of procurement and purchasing at Anchor and will be speaking at social housing procurement event PfH Live on 25 June
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