Is pharmaceutical procurement fit for the future?

Towards the end of last year, PepsiCo caused a bit of a stir when it announced it was eliminating its marketing procurement function.

Is pharmaceutical procurement fit for the future? asks Andrew Thomas
Is pharmaceutical procurement fit for the future? asks Andrew Thomas
At the heart of the announcement was a stark insight: the organisation was struggling to see the value of procurement for its business. 

This is not an anti-procurement article.  

It is, however, a challenge to any individual working in any business function who cannot articulate the wider goals of that business and, most crucially, how they contribute.  And I mean benefits, not features. 

In any role, the value you provide to the business will be measured by how close you are to that business. 

Good procurement colleagues genuinely understand the nature of their business – and realise that buying consultancy services from a strategic agency partner is really very different from buying ‘equipment’ from a ‘supplier’.

Let’s take pitching new business – a process that is increasing being managed by procurement teams.  
With just a few weeks to research the area, develop our insights, formulate our strategy, develop a creative theme, a tactical programme and build budgets, we need to get up to speed as fast as possible. 

One of the first things we do is interrogate the brief and go back to the client with some considered questions and it represents the first chance we as agencies get to show our ‘smarts’.  

And that is where the problem lies.  Permit me an analogy to illustrate my point: 

Any PR professional will acknowledge the value of arranging one-to-one time between your key journalist and your expert – more specifically, the value this approach has over a press conference involving numerous journalists.  

The main reason being that the smartest journalists in the room aren’t that keen to ask their ‘killer’ questions in front of their peers (competition). Why would they?
They’d be giving away their intellectual property. It’s the same with us. 

So, why should that even matter to the client? When the client’s responses to our questions are collated and returned to all agencies taking part in the process – in the spirit of ‘fairness’ – rather than levelling the playing field, it completely flattens it.  

Consolidating feedback increases the likelihood of all agencies’ responses being similar when what you really want is a healthy range of opinions and viewpoints. 

Why else would you put the brief out to different agencies in the first place?  

So, you could get ‘beige’ and it fundamentally weakens the process. Which agency had the original strategic insight?  

The kernel of a great creative idea? How would you even know?   

The most worrying thing though is that you might not even realise until you are six months down the line and your competitor is dominating the conversation, their insights and understanding just that bit sharper. Just a little quicker. 

We really need to differentiate genuine fairness from the appearance of fairness.   

I would urge all my colleagues client-side to consider whether their current business practices are really helping their decision-making, particularly when it comes to working with agency partners.  

It’s important for you, it’s really important for us agency-side and it’s absolutely crucial to the success of your key brands.  

Andrew Thomas is director of Red Door Unlimited

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