Procurement Council Blog: The Disruption of Procurement

Once a procurement professional always a procurement professional?

As procurement leaders are increasingly being seen less as cost savers (or spenders) and more as strategic enablers, we need to consider what procurement will and should look like in the imminent future.

“Seasoned” procurement folks have years of experience, many in the same industry and within the same company. There are, of course those of us who, most assuredly still in procurement, have boldly transferred that experience to other companies and even different verticals.

However, and regardless of industry sector it is the same story over and over again – get quality parts on time, at the lowest cost and hooray – job well done!

Of course, most procurement folks can do this activity quite effectively. While there are instances that call for greater creativity as it is not always a one size fits all solution, the goal, by and large, is ultimately the same.

So why change this seemingly winning concept?

Because if all of our activity as procurement professionals is solely “focused” on procuring quality goods at the lowest cost, then both the company and we are missing the “big picture” regarding our value potential.

At its core, procurement is an integral part of the company’s overall strategy. Our ability to purchase materials at the right time, cost and best quality will determine if operations will continue.

Within this context, we as procurement professionals need to evolve the way we present our invaluable experience, and diverse knowledge in a way that our companies can better grasp the greater benefits that we bring to the collective enterprise.

You are probably wondering how – how can I demonstrate that procurement is so much more than getting “quality parts on time at the lowest cost?” Here are a few suggestions:

• Utilize procurement as a trusted advisor for market trends, revenue and profitability, social responsibility, diversity, internal and external relationships.
• Tie procurement functions to sales funnels – companies are missing a critical link by separating sales and procurement- you can’t sell what you don’t have, and you can’t make money if you don’t buy right. Sales often need pricing flexibility to close the deal and procurement provides that value.
• Marketing- don’t be a stranger- Procurement is in the know, link marketing with procurement insights to industry roadmaps and cost outlooks to assist with what you want to promote.
• Engineering and Procurement are generally two in a box- a bond that should never be broken. Engineering DFx utilizes procurement’s industry knowledge to create products that can break barriers and give your company a competitive advantage.

Procurement spends the lion’s share of a company’s money, so you have to make it count beyond being a “simple” transaction, which is where the “disruptive” element of disrupting procurement comes in.

So, to sum it up, unlike any other function, procurement touches and therefore creates value in all areas of your company. By enabling others to see how much more procurement can do beyond cost savings will open the doors of opportunity for greater returns not only for your company but also for yourself.