Are you ready for the holidays? Those of you in retail are responding, “Of course, I’ve had to be worrying about stocking up and overseas freight for weeks now. After all, some FedEx Demand Surcharges start on September 29th this year.” The rest of you might be looking at me like I’m crazy, as summer only just ended. But a timely post on LinkedIn last week reminded me that ‘tis the season to begin planning for the holidays–at least in the procurement world. Today we’ll talk about what your procurement team should be doing between now and the end of the year, what to watch out for between now and then, and some concrete thoughts on how to succeed over the holidays. While today’s post is most useful if your fiscal year ends on December 31st, most of this holds true no matter your fiscal calendar.
Planning September-December
The ever-insightful Mathew Schulz posted the following on LinkedIn on August 26th:
Steal this ‘enjoy your holidays’ playbook.
4 months until year end, 5 things to do now:
- Grab the vendor renewal list thru Dec 31 and organize them into each function – marketing, IT, Sales, etc., rank them by spend amount & criticality
- Map the business owner to each function, reach out to the business leader and let them know you’ll be supporting their teams and removing work from their plates
- Get invitations to team meetings in the next month and share the gold mine of info you have, collect renewal update info from the team and get to work
- Do what you do best, partner with external vendors and internal stakeholders to negotiate deals, close them, and get things wrapped before end of year
- Finally, celebrate with your team, share the success, you’ve built a better buying org and enjoy time with family and friends… on to next year
Proactive procurement in action.
Ps. Favorite stocking stuffer?
I agree with all of this, and want to add to it. There’s definitely an assumption here that you have a vendor renewal list or something similar, outlining all the agreements expiring December 31. While this is likely in a more mature supply chain, you might not. So start with any purchase orders or blanket purchase orders you have expiring at the end of the year. If you have contracts, go looking for any that expire all the way through at least January 15th. There probably aren’t very many expiring in the first two weeks of the year, but ask me how I know how bad it is if they creep up on you. If you have absolutely no technology to organize contracts, at the very least create a shared folder for each supplier and name the folder with the agreement expiration date (i.e. “Fastenal-Dec2026”).
I also love Mathew’s approach about reaching out to the business leaders to support them. I have more guidance on attending business unit staff meetings here; remember to be respectful and thoughtful and avoid lecturing your internal customers on procurement policy. Don’t expect to get to and through the end of the year madness without engaging your business units and supporting them well.
Run-up to the End of the Year
Now let’s execute on your plan through the end of the year. Here are some concrete actions so you succeed when those last two weeks of the year arrive:
- Watch your delivery dates and try to get as many things delivered by December 12th (Friday) or 15th (Monday) as possible. This way they have time to get received in, invoiced, and paid by the end of the year. You will really upset your Accounts Payable department if something big that needs to go on this calendar year gets delivered on December 29th. If you have some or all facilities shut down for the last two weeks of the year, this problem is only compounded as there is no one “at home” to receive items over a shutdown. Go look at your suppliers’ promise dates and try to keep them to the first half of December.
- Beware end-of-year price increases, which this year will include tariffs. Make sure you have your suppliers back up their tariff increases with clear documentation, but also make use of your contracted price notification periods. If a supplier contract contains a price notification clause (i.e. prices can change every six months and require 60 days’ notice prior to changing), make sure the supplier is adhering to that timeframe. If a price goes up January 1st and you have a 60-day notice, you need to receive that notice by November 2nd. Be very clear when supplier price changes take effect. An acknowledged PO is a contract – the supplier should honor the price on the PO, even if the item is delivered after a price increase. Whatever the supplier has on contract, work on holding them to it. And if you don’t have contracts with key suppliers, this is yet another reason to get those in place.
- Make suppliers justify those new prices. Require suppliers to produce pricing indices, tariff receipts, true inflation rates, etc. to back up their claim that they need that 10% increase (on top of the one last year!). Don’t let them send you a simple form letter and then cause invoice mismatch holds for every one of their orders for the next three months. (Side note: reach out to your sales team and see if they need help with data for their customers. They might be trying to justify price increases of their own, and you probably hold data that will help them do so. You will build more internal relationships, show value, and maybe get faster access to those demand curves you need so badly.)
- See whether any of your internal customers are going to struggle to meet their budgets. December 1st is too late for any interventions, early September is much better. Do they need some help reviewing purchase orders or blankets with remaining balances to make sure they will land on their end-of-year numbers? Do they need to either push some expenses into January or pull them forward into December based on their year (especially indirect purchases)? As the key supplier relationship holder, how can you and the supplier work together to support your business unit stakeholders and help them reach their goals?
- Figure out now which team member is going to be “on duty” over the holidays. It’s incredibly frustrating to internal stakeholders to need something over the holidays and send a note to Sally, whose out of office says her backup is Steven, whose out of office says his backup is Sally. Figure out who will “hold down the fort”, even if it’s remotely, and harmonize your internal messages to point to the right person. Now is the time to figure that out so the whole team can plan their holiday if traveling. Bonus points for figuring out which executive leader can be available for approvals, signatures, etc. over the holidays.
The Last Week of the Year
Hopefully you made it to the last week of the year! You’ve anticipated every renewal and expiration you can find, whoever is on duty is clearing their inbox and building a nice collection of out-of-office replies, and at least one key supplier sent some choice holiday snacks to the office. Some last things to consider:
- Watch for cyber attacks. Bad actors simply love the “Everyone is out of the office and I need to purchase this large ticket item quickly!” fake CEO scam. Make sure whoever is on duty knows well to look for fake emails, signatures that don’t match your standard format, and just plain anything extra weird.
- Enjoy the quiet. I always loved working on Friday, December 26th when the Christmas holiday fell on the 25th. I could get through So. Much. Email! I could work on all the things that were hard to find uninterrupted time for and start my next year with a beautifully clean slate. I know not everyone is this way, and not all industries allow for the quiet (retail, anyone?!), but if you have it, enjoy it.
- Celebrate the wins. I’m notoriously bad at this. I tend to be very, “Ok, we finished that thing. What’s next?” (It’s probably the Clifton Strengths Achiever part of me) But it’s incredibly important to celebrate that you completed the calendar year and had at least some wins along the way. Acknowledge the excellent work your peers, team members, and business units did before you start on the next thing.
Hopefully this sets you up for success as we enter the final stretch of the calendar year. If you’d like to talk about your end-of-year plan, let’s chat. If you’d like to get these articles weekly straight to your inbox and never miss one, sign up for my newsletter.
My book, Transform Procurement: The Value of E-auctions is now available in ebook, paperback and even hardcover format: https://www.amazon.com/dp/B0F79T6F25
