design:retail - July 2017 - 6

editor's note

006

A Procurement
Paradox?

ALISON EMBREY MEDINA
EDITOR IN CHIEF/ASSOCIATE PUBLISHER

alison.medina@emeraldexpo.com
@dretaileditor

F

OREWARNING: THIS IS

not a new topic. If you
work anywhere near the
retail design industry, the
terms procurement, value
engineering and cost analyzation are more than likely a part of
your daily vernacular. In retail, the price of
materials and specifications, as you know,
is always a top-line priority, and particularly in the United States.
Let's rewind back to World War II for
a moment. During the war, there were
shortages of skilled labor, raw materials
and a scarcity of certain component parts,
as has been well documented in U.S. history books.
Lawrence D. Miles was a purchasing engineer on the team responsible for buying
raw materials for the General Electric Co.
during this time. He quickly realized that
if he was unable to obtain a particular
material, then it was necessary to find
a replacement material that performed the same
function. He developed a creative, team-based, sixstep approach dubbed "value analysis" (later coined
"value methodology" or "value engineering," likely
because of GE's engineering background), a methodology that is used to improve the "value" of goods,
products or services by examining the ratio of function to cost. (Miles later published "Techniques of
Value Analysis and Engineering" in 1961-now in its
third edition and printed in 12 languages.)
Value engineering employs a rational logic base
with problem-solving structure at its core-"how"
and "why" are common questions asked as part of
the process. In fact, on the Lawrence D. Miles Value
Foundation website, he is quoted as saying "All

JULY 2017

DESIGNRETAILONLINE.COM

"Value Methodology
is a systemic approach
that seeks to improve
the value of a project,
product or service
by providing the
necessary functions
to meet the required
performance at the
lowest overall cost."
LAWRENCE D. MILES VALUE FOUNDATION

cost is for function." In theory, value engineering
promotes the substitution of materials and methods
with less expensive alternatives, without sacrificing functionality. Physical attributes are not, in this
method, supposed to play a role in decision making.
The issue for the retail industry, of course, is
how this very logical engineering process fits into
design, form and aesthetics-not to mention the
brand, purpose and mission behind a retailer's
core. I've heard stories of design teams duking it
out with their in-house procurement teams over
anything from a simple hanger to an entire perimeter wall. Sometimes the very mention of the word
"procurement" enacts an uncomfortable shudder
from the design team. On the plus side, this has led

GLOBALSHOP.ORG

to a growth of collaboration between retailer and manufacturer, to work together
to redefine form AND function, and at a
cost the procurement team can live with.
But procurement and value engineering are not always an in-house obstacle.
Some retailers and brands have begun
outsourcing the procurement of materials, like signage, POP, fixtures and even
mannequins, to third-party logistics companies that find and source product for
them directly. While as a business practice this seems economical and practical,
what happens to in-house design teams?
(Will there still be in-house design?)
Does it end the ability for collaboration
between the retailer and manufacturer?
Does value engineering by a third-party
firm impact design integrity? Will design
be commoditized?
Value engineering is certainly not the
end-all-be-all for retail-it has probably
saved retailers millions of dollars. But in
an age where retail needs innovation and disruption more than ever, commoditized, lowest-cost
design may be a risky direction to take.
In this July Fixture Leaders issue, we wanted to
shine a light on this industry phenomenon.
What does procurement look like in five or 10
years? More in-house? More third-party? Would
love to hear your thoughts! Email me directly at
alison.medina@emeraldexpo.com.


http://www.DESIGNRETAILONLINE.COM http://www.GLOBALSHOP.ORG

Table of Contents for the Digital Edition of design:retail - July 2017

design:retail - July 2017
Contents
Editor’s Note
On Trend
We Love This!
Designer Picks
Clicks & Mortar
Postcard
Mingle
Before & After
How'd They Do That?
Inspirations
Have You Heard?
Ask Judy
Shopping with Paco
Best Friends Animal Society
b8ta
Design Within Reach
Fixture Leaders
Products
Backstory
design:retail - July 2017 - Intro
design:retail - July 2017 - CT1
design:retail - July 2017 - CT2
design:retail - July 2017 - design:retail - July 2017
design:retail - July 2017 - Cover2
design:retail - July 2017 - 1
design:retail - July 2017 - Contents
design:retail - July 2017 - 3
design:retail - July 2017 - 4
design:retail - July 2017 - 5
design:retail - July 2017 - Editor’s Note
design:retail - July 2017 - 7
design:retail - July 2017 - On Trend
design:retail - July 2017 - 9
design:retail - July 2017 - 10
design:retail - July 2017 - 11
design:retail - July 2017 - 12
design:retail - July 2017 - 13
design:retail - July 2017 - We Love This!
design:retail - July 2017 - 15
design:retail - July 2017 - 16
design:retail - July 2017 - 17
design:retail - July 2017 - 18
design:retail - July 2017 - 19
design:retail - July 2017 - Designer Picks
design:retail - July 2017 - 21
design:retail - July 2017 - Clicks & Mortar
design:retail - July 2017 - 23
design:retail - July 2017 - Postcard
design:retail - July 2017 - 25
design:retail - July 2017 - Mingle
design:retail - July 2017 - 27
design:retail - July 2017 - 28
design:retail - July 2017 - 29
design:retail - July 2017 - 30
design:retail - July 2017 - 31
design:retail - July 2017 - 32
design:retail - July 2017 - 33
design:retail - July 2017 - Before & After
design:retail - July 2017 - 35
design:retail - July 2017 - How'd They Do That?
design:retail - July 2017 - 37
design:retail - July 2017 - 38
design:retail - July 2017 - 39
design:retail - July 2017 - Inspirations
design:retail - July 2017 - 41
design:retail - July 2017 - Have You Heard?
design:retail - July 2017 - 43
design:retail - July 2017 - Ask Judy
design:retail - July 2017 - 45
design:retail - July 2017 - Shopping with Paco
design:retail - July 2017 - 47
design:retail - July 2017 - Best Friends Animal Society
design:retail - July 2017 - 49
design:retail - July 2017 - 50
design:retail - July 2017 - 51
design:retail - July 2017 - 52
design:retail - July 2017 - 53
design:retail - July 2017 - 54
design:retail - July 2017 - 55
design:retail - July 2017 - 56
design:retail - July 2017 - 57
design:retail - July 2017 - b8ta
design:retail - July 2017 - 59
design:retail - July 2017 - 60
design:retail - July 2017 - 61
design:retail - July 2017 - 62
design:retail - July 2017 - 63
design:retail - July 2017 - 64
design:retail - July 2017 - TCover1
design:retail - July 2017 - TCover2
design:retail - July 2017 - T1
design:retail - July 2017 - T2
design:retail - July 2017 - T3
design:retail - July 2017 - T4
design:retail - July 2017 - T5
design:retail - July 2017 - T6
design:retail - July 2017 - T7
design:retail - July 2017 - T8
design:retail - July 2017 - TCover3
design:retail - July 2017 - TCover4
design:retail - July 2017 - 65
design:retail - July 2017 - Design Within Reach
design:retail - July 2017 - 67
design:retail - July 2017 - 68
design:retail - July 2017 - 69
design:retail - July 2017 - 70
design:retail - July 2017 - 71
design:retail - July 2017 - 72
design:retail - July 2017 - 73
design:retail - July 2017 - Fixture Leaders
design:retail - July 2017 - 75
design:retail - July 2017 - 76
design:retail - July 2017 - OICover1
design:retail - July 2017 - OICover2
design:retail - July 2017 - OI1
design:retail - July 2017 - OI2
design:retail - July 2017 - OI3
design:retail - July 2017 - OI4
design:retail - July 2017 - OI5
design:retail - July 2017 - OI6
design:retail - July 2017 - OI7
design:retail - July 2017 - OI8
design:retail - July 2017 - OI9
design:retail - July 2017 - OI10
design:retail - July 2017 - OI11
design:retail - July 2017 - OI12
design:retail - July 2017 - OICover3
design:retail - July 2017 - OICover4
design:retail - July 2017 - 77
design:retail - July 2017 - 78
design:retail - July 2017 - 79
design:retail - July 2017 - 80
design:retail - July 2017 - 81
design:retail - July 2017 - 82
design:retail - July 2017 - 83
design:retail - July 2017 - 84
design:retail - July 2017 - 85
design:retail - July 2017 - 86
design:retail - July 2017 - 87
design:retail - July 2017 - 88
design:retail - July 2017 - 89
design:retail - July 2017 - Products
design:retail - July 2017 - 91
design:retail - July 2017 - 92
design:retail - July 2017 - 93
design:retail - July 2017 - 94
design:retail - July 2017 - 95
design:retail - July 2017 - Backstory
design:retail - July 2017 - Cover3
design:retail - July 2017 - Cover4
design:retail - July 2017 - MCover1
design:retail - July 2017 - MCover2
design:retail - July 2017 - M3
design:retail - July 2017 - M4
design:retail - July 2017 - M5
design:retail - July 2017 - M6
design:retail - July 2017 - M7
design:retail - July 2017 - M8
design:retail - July 2017 - M9
design:retail - July 2017 - M10
design:retail - July 2017 - M11
design:retail - July 2017 - M12
design:retail - July 2017 - M13
design:retail - July 2017 - M14
design:retail - July 2017 - M15
design:retail - July 2017 - M16
design:retail - July 2017 - M17
design:retail - July 2017 - M18
design:retail - July 2017 - M19
design:retail - July 2017 - M20
design:retail - July 2017 - M21
design:retail - July 2017 - M22
design:retail - July 2017 - M23
design:retail - July 2017 - M24
design:retail - July 2017 - M25
design:retail - July 2017 - M26
design:retail - July 2017 - M27
design:retail - July 2017 - M28
design:retail - July 2017 - M29
design:retail - July 2017 - M30
design:retail - July 2017 - M31
design:retail - July 2017 - M32
design:retail - July 2017 - M33
design:retail - July 2017 - M34
design:retail - July 2017 - M35
design:retail - July 2017 - M36
design:retail - July 2017 - M37
design:retail - July 2017 - M38
design:retail - July 2017 - M39
design:retail - July 2017 - M40
design:retail - July 2017 - M41
design:retail - July 2017 - M42
design:retail - July 2017 - M43
design:retail - July 2017 - M44
design:retail - July 2017 - M45
design:retail - July 2017 - M46
design:retail - July 2017 - M47
design:retail - July 2017 - M48
design:retail - July 2017 - M49
design:retail - July 2017 - M50
design:retail - July 2017 - M51
design:retail - July 2017 - M52
design:retail - July 2017 - M53
design:retail - July 2017 - M54
design:retail - July 2017 - M55
design:retail - July 2017 - M56
design:retail - July 2017 - M57
design:retail - July 2017 - M58
design:retail - July 2017 - M59
design:retail - July 2017 - M60
design:retail - July 2017 - M61
design:retail - July 2017 - M62
design:retail - July 2017 - M63
design:retail - July 2017 - M64
design:retail - July 2017 - M65
design:retail - July 2017 - M66
design:retail - July 2017 - M67
design:retail - July 2017 - M68
design:retail - July 2017 - M69
design:retail - July 2017 - M70
design:retail - July 2017 - M71
design:retail - July 2017 - M72
design:retail - July 2017 - M73
design:retail - July 2017 - M74
design:retail - July 2017 - M75
design:retail - July 2017 - M76
design:retail - July 2017 - M77
design:retail - July 2017 - M78
design:retail - July 2017 - MCover3
design:retail - July 2017 - MCover4
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http://www.nxtbook.com/nxtbooks/designretail/201603
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http://www.nxtbook.com/nxtbooks/designretail/20151112
http://www.nxtbook.com/nxtbooks/designretail/201510
http://www.nxtbook.com/nxtbooks/designretail/201509
http://www.nxtbook.com/nxtbooks/designretail/201508
http://www.nxtbook.com/nxtbooks/designretail/201507
http://www.nxtbook.com/nxtbooks/designretail/201506
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http://www.nxtbook.com/nxtbooks/designretail/201503
http://www.nxtbook.com/nxtbooks/designretail/201502
http://www.nxtbook.com/nxtbooks/designretail/201501
http://www.nxtbook.com/nxtbooks/designretail/20141112
http://www.nxtbook.com/nxtbooks/designretail/201410
http://www.nxtbook.com/nxtbooks/designretail/201409
http://www.nxtbook.com/nxtbooks/designretail/201408
http://www.nxtbook.com/nxtbooks/designretail/201407
http://www.nxtbook.com/nxtbooks/designretail/201406
http://www.nxtbook.com/nxtbooks/designretail/20140405
http://www.nxtbook.com/nxtbooks/designretail/201403
http://www.nxtbook.com/nxtbooks/designretail/201402
http://www.nxtbook.com/nxtbooks/nielsen/designretail_201401
http://www.nxtbook.com/nxtbooks/nielsen/ddi_20131112
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http://www.nxtbook.com/nxtbooks/nielsen/ddi_201307
http://www.nxtbook.com/nxtbooks/nielsen/ddi_201306
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http://www.nxtbook.com/nxtbooks/nielsen/ddi_20130203
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http://www.nxtbook.com/nxtbooks/nielsen/ddi_201208
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http://www.nxtbook.com/nxtbooks/nielsen/ddi_200906
http://www.nxtbook.com/nxtbooks/nielsen/ddi_200905
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