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

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

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"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

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