7 Ways Procurement Professionals Can Impact an Organization
Explore 7 ways procurement professionals can rise to the occasion and dramatically impact their organizations.
By Hugo Britt | April 23, 2023
Today, procurement professionals have countless opportunities to impact their organizations and truly make a difference. For decades, the profession endured the widely-held perception that it was nothing more than a back-office function. Fortunately, this viewpoint has changed gradually over time.
Procurement professionals making an impact
Particularly in the wake of COVID-19, procurement has proven itself to be more critical than ever before. Below, we discuss seven ways procurement professionals can positively impact their organization.
Implementing effective supply chain strategies
A supply chain strategy is far more complex than finding cheap prices from suppliers. The recent global pandemic, for example, has highlighted the major risks associated with running a just-in-time supply chain.
It may be beneficial to switch to a just-in-case model. This could minimize major disturbances and protect your supply chain from similar incidents. Review stock levels and product reorder points, as well as weighing up the benefits of re-shoring and identifying contingency suppliers.
Business leaders will continue to rely on procurement to determine the best course of action. It’ll also be up to procurement to execute these strategies.
Procurement professionals have endless opportunities to impact their organizations and truly make a difference. The public perception of procurement is changing and the function has proven to be more critical than ever before.
Meeting the demands of multiple stakeholders
To bail out failing businesses during the pandemic, governments around the globe have printed and distributed approximately $15 trillion. As the Harvard Business Review highlights, this represents a move towards a “stakeholder economy.” As a result, organizations are needing to answer to their shareholders and investors. Their employees, suppliers, and distributors are also looking to stay informed.
Therefore, procurement professionals will play a key role in helping their organization meet the needs, values, and demands of these stakeholders.
Establishing trust throughout the supply chain
The responsibility of building a stable supply chain falls on procurement’s shoulders. Ongoing disruption and delays prove the need for developing long-term, meaningful relationships with suppliers. Developing these strategic relationships will lead to additional value in terms of loyalty, trust, and reliability during times of crisis.
Good supplier relationship management (SRM) enables a more seamless negotiation process, better contractual terms, and a better quality of service. The most effective procurement teams have established preferred supplier programs. These types of programs allow professionals to invest time in supplier relationships that matter the most.
Driving cost reductions
Cost reduction is the competency most commonly associated with procurement. Today, driving down cost is no longer the sole, or even the most important, focus for a procurement professional. It can, however, have an immediate impact on the company’s bottom line.
Procurement is expected to implement policies that address maverick and tail spend across the business. To achieve this, professionals must effectively communicate the procurement strategy to all employees. Show commitment to driving transparency and compliance throughout the organization.
Optimizing procurement processes has an enormous impact on supply chain efficiency. Buyers will spend less time procuring what they need. At the same time, goods and services will likely to be delivered on time and in good condition. In addition, formalizing procurement across the business makes it easier to identify any gaps or failings within the supply chain.
Implementing a comprehensive data strategy gives procurement better spend visibility, making it easier to analyze and optimize.
Procurement professionals are constantly engaging with different stakeholders and suppliers across the globe. They’re in a unique position to identify vendors who can provide innovative products and services and create a competitive advantage.
Organizations are under increased pressure to deliver when it comes to Corporate Social Responsibility (CSR). CSR includes environmental initiatives, philanthropy, economic responsibility, and ensuring ethical business practices throughout the organization and the supply chain.
Procurement has substantial influence here, as well. Something as simple as ensuring parts and products are delivered in green vehicles or packaged with recyclable materials makes a difference. Encouraging manufacturers to use energy saving equipment and finding local suppliers that drive sustainability are also options.
Ready to make a true impact? Una can help. Contact us to learn more.