Archive: September, 2016

Any colour so long as it is black

“Any customer can have a car painted any colour that he wants so long as it is black” stated Henry Ford in 1909 about the first mass produced car, the Model T. Simplifying products enables quality to improve and cost to reduce. As part of a demand management strategy, procurement professionals apply this maxim to most products and services. Software is purchased “out-of-the-box”, “white-label” products are available in the consumer goods catalogue and “non-branded” items are promoted as part of the office supplies contract.

If you have purchased a new car recently, you will know that most manufacturers offer a bewildering array of options, not just colour. Fuel type, engine size, interior trim, driver safety equipment must be configured before an order is placed. The automotive industry provides a single platform and then allows customers to create the final product to suit their particular needs.

The automotive sector has lead the way for the procurement profession in many ways through the adoption of just-in-time management or kaizen. The pressure of delivering extra savings should not prevent us offering our internal stakeholders a choice for items that are important to them. But this is not new, after all, despite what Henry Ford said, he still offered the Model T as a 2-door, 4-door, roadster, town car, pickup and sedan in fire engine red.