Story: The Mining Project without Rail Capacity
An Australian coal mining company were expanding their mine and required additional rail capacity to meet the production of their expansion.
Something went wrong in the procurement process and they ended up securing a take-or-pay arrangement for capacity less than planned. There were no provisions for variability of production.
The result was that they were stuck with a expensive choice:
a) Stop coal mining for a whole month of the year (at a cost of $1M / day) or
b) Negotiate with the rail company with them knowing full well that you don’t have any other choice.
What went wrong? A lack of alignment between procurement decisions and the project’s operational realities.
Procurement without strategic insight is like piloting without a compass—teams may diligently follow orders and focus on immediate tasks, but they lack the tools to navigate the broader journey.
Without a clear direction, issues escalate, risks remain unchecked, and opportunities for improvement are missed.
Below are the common traits of inexperienced procurement teams that can lead to inefficiencies and avoidable failures in major infrastructure projects.
1. Poor Communication
Inexperienced teams often fail to escalate critical issues until it’s too late, delaying decisions and forcing rushed, suboptimal outcomes. As one CFO lamented, “I only hear about problems when I have to sign off on contracts, leaving me with no choice but to accept poor decisions that could’ve been avoided with earlier warnings.”
These teams focus narrowly on tasks, overlooking the bigger picture. In contrast, experienced procurement teams anticipate challenges, communicate risks clearly, and proactively align their recommendations with project goals, ensuring that decisions are informed and timely.
2. Inability to Manage Uncertainty
Infrastructure projects are fraught with uncertainties—whether it’s ground conditions in mining or shifting project requirements. Inexperienced teams often struggle to anticipate or adapt to these challenges, leaving projects exposed to delays, cost overruns, or scope changes. Successful procurement requires flexibility, foresight, and a mindset geared toward risk mitigation rather than reactionary measures.
3. One-and-Done Mentality
The procurement process thrives on iterative market engagement. However, inexperienced teams often push for quick closure, prioritizing speed over strategic refinement. For instance, waiting for “final” drawings—rarely final—creates rigid bottlenecks, preventing timely adjustments when circumstances change. Strong procurement teams strike a balance between flexibility and decisive action, ensuring contracts and scopes can adapt to evolving project needs.
4. Narrow Cost Focus
Focusing solely on reducing the cost of individual work packages misses the opportunity to optimize costs across the entire project. This shortsighted approach, often tied to a one-and-done mindset, sacrifices long-term value for the sake of immediate closure. Strategic procurement takes a holistic view, aligning cost decisions with overall project outcomes like cost per tonne, cost per passenger kilometer, or cost per connection.
5. Passive Procurement
Inexperienced teams frequently adopt a “yes-man” approach, blindly executing directives without questioning underlying strategies or assumptions. This passive stance can allow risky commercial models or unrealistic specifications to proceed unchecked, leading to avoidable complications. Effective procurement teams, however, act as strategic advisors—challenging decisions, offering alternative solutions, and ensuring risks are addressed before they escalate.
6. Lack of Operational Insight (“Clean Shoes”)
Procurement professionals who have never set foot on-site lack a critical understanding of the operational realities and challenges of a project. Without firsthand experience, they fail to appreciate the real-world impact of their decisions, often resulting in specifications or contracts that are impractical for execution.
7. Over-Reliance on “Newbie” Consultants
Smart, well-dressed consultants can bring fresh ideas, but when it’s their first time in a procurement role, their inexperience often shows. These consultants may excel at presentations and frameworks but lack the practical expertise to navigate the complexities of major projects, leading to flawed strategies and avoidable mistakes.
The Path to Strategic Procurement Excellence
Recognizing these hallmarks is the first step in strengthening procurement practices. Experienced teams bring strategic insight, operational awareness, and a proactive approach, ensuring procurement delivers value that aligns with long-term project objectives. For infrastructure projects, procurement isn’t just a task—it’s a critical function that determines project success or failure.
Procurement: The Missing Link to Project Success
Every year, Australian infrastructure projects lose millions to preventable procurement mistakes—are you at risk?
For senior project managers, the hidden danger isn’t just in unforeseen delays or cost blowouts. It often lies in a poorly equipped procurement function.
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Our team brings over 15 years of experience in procurement, with strong commercial and operational expertise.
We help clients navigate complex infrastructure projects by identifying risks early, optimizing contracts, and aligning procurement with project goals.
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