How do you define 'Value' in the procurement process?

How do you define 'Value' in the procurement process?

Published: 17/01/2019

How do you define ‘Value’ in the procurement process?

Value versus initial cost?

Too often, people don’t make sufficient effort to look for Value and lowest cost wins. It is the distraction on good procurement despite major lessons not learnt from the likes of Carillion’s collapse and the cheap cladding causing the Grenfell Tower tragedy. Admittedly, it’s understandable why buyers might choose to procure on the basis of picking whoever can (theoretically) do the job cheapest at the outset, but long term value, by fulfilling the strategic objectives of their company to the full, is what they really want to find.

We are so used to retailers offering price comparisons with rivals rather than explaining the virtues of better quality, even politicians making dramatic announcements about rail fares being frozen rather than taking the time to show investments in services being improved at greater cost to the passenger. People choose to fly with cheaper budget airlines knowing the overall experience will be worse.

Short term cost vs longer term value

Everywhere in society, the initial consideration is how their purse will be affected in the short term rather than exploring in detail the wider benefits of paying more initially but less in the long run. The real decision is to choose between the cheapest and what might be the best for you.

A good example of an exception is when you buy a car, yes you haggle on price, but you also want something that won’t break down, that won’t need you to book costly time off work to take the car in for expensive repairs.

More recently in the commercial environment, construction has seen a glimmer of recognition that those who do charge more, but provide a better service to the client must be part of a better solution.

However, demonstrating value can be an expensive and time consuming process for companies without big corporate PR machines, but the quality of the client base and excellent referrals must be seen as proof of the pudding and a firm recognition that this particular company is successfully doing business better.

Purchasing smarter

For those buyers who really explore and listen to these potential benefits, to be seen across the whole service, and taking time to understand how those benefits  improve their own experience, will always be rewarded for that investment in effort.

This is how D.Tec has become so successful at winning and retaining clients, from government agencies, police forces, national plc’s and many SMEs. We go out to look at what our clients objectives and ambitions are and maintain our relationship by helping them fulfil these objectives..

For example, in the workplace sector, we listened to our clients concerns about the time both the employee and a manager are away from their day to day tasks whilst performing the drug screening. Hence we reduced the time taken from 10 minutes to 8 and now a market leading time of just 5 minutes for the most comprehensive drug screen and including an alcohol screen as well. This is a doubling in value?

We also listened to clients who wanted a result as close to that offered by urine, but without upsetting the majority of innocent employees by asking them for urine. D.Tec developed the Dual, screening both skin for longer time and saliva for short term drug consumption. Here we have improved immensely the social value for all.

All clients want to make sure they do not end up in arbitration, hence our legally defensible urine confirmation service. But D.tec improved on this again with their traffic light system reporting to a company, all those who had taken the drug but were not declared positive by the laboratory.

Check out the ‘Dual’ page and Let D.Tec and DrugWipe help your company find and maximise value.

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