Understanding Priorities: A Key Consideration in Effective Sourcing

[custom_frame_right shadow=”on”]Sourcing from China, Procurement China, Effective Purchasing China, Supply Chain Management China[/custom_frame_right] When people are asked to define their priorities as it relates to their sourcing initiative, we usually hear – “We want the best possible quality for the best possible price and we need it delivered yesterday.”  This is not a prioritization, but a wish list.  Unfortunately, when everything is a priority, nothing is a priority!

There is a great story that illustrates this point well.  A man, while driving his regular route to work, noticed a car sitting at the far end of a driveway, with its nose edging out ever so slightly onto the street.  The first day he passed, he did so with caution as he assumed someone was trying to see whether it was safe to pull out. But as he drove past he noticed that the car was empty.  For several days he noticed the car in the same position, still empty.

[custom_frame_left shadow=”on”]Sourcing China, Procurement China, Supply Chain Management, Proper Prioritization[/custom_frame_left] One day, as he passed, he happened to look at the car just as he went by, and noticed a FOR SALE sign taped just below the front grill. The sign was hardly visible to anyone driving by unless they made an effort to look at the vehicle closely, taking their eyes off the road, just as they passed in front of the parked car. Why would they put the sign there? The answer was simply that they had only one sign, and they wanted to advertise to people traveling both directions, so they compromised and put it on the front of the car. What they evidently did not consider was that in reaching this compromise, they made it so the sign could not been seen by anyone at all. Both directions were a priority, so neither direction was a priority.

There are many methodologies to defining and organizing priorities.  It is a matter of personal preference, but the end result is the same.  The methodology below is one we prefer because of its simplicity.

Must Have / Should Have / Nice to Have

Must Have: These are the absolutely critical specifications, criteria or other goals that MUST be included with any offer you receive.  You will define your ultimate success based on the content you write down here.  Make sure to prioritize within this category from most important to least important within the category.

Should Have: These would include all goals that should be achieved (but not essential) to determine whether the effort was successful or not.  Prioritize the “Should Haves” as well if possible.  These will help you differentiate between one offer and another in the event two solutions meet on an equal basis all Must Have priorities.

Nice to Have: Anything else that you would like to see included but clearly not going to define whether you were successful or not nor will they be used to sway your decision from one supplier to another except as a tiebreaker.

Remember that priorities may change.  It can be helpful to note why a priority is rated high or low, especially if we know that there are temporary influences at work that will change in the future.  You may have a short lead time of less than 30 days because you are out of inventory, but are aware that with proper planning this can be addressed going forward.  Hence short lead time will be less of a priority in the future.