7 Ways Procurement Professionals Can Impact an Organization
By Hugo Britt | November 17, 2020
Today, procurement professionals have countless opportunities to impact the
organization they work for and 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.
Particularly in the wake of COVID-19, procurement has proven itself to be more business-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 coronavirus pandemic, for example, has highlighted the major risks associated with running a just-in-time supply chain.
To better manage unprecedented disruption and safeguard the organization’s supply chain against such events, an organizational strategy will likely move towards a just-in-case model. This means reevaluating safety stock levels and product reorder points, as well as weighing up the benefits of reshoring and identifying contingency suppliers.
Business leaders will look to procurement teams to advise on the best course of action and to plan and execute these strategies.
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 need to answer not only to their shareholders and investors but to employees, suppliers, distributors, and society at large.
Procurement professionals will therefore play a key role in helping their organization to meet the (potentially conflicting) 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. The
disruption and delays caused by the coronavirus, for example, have proven the value in nurturing long-term, ,meaningful relationships with suppliers, ensuring their loyalty and reliability throughout times of crisis and beyond.
Pandemic aside, 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 organization’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 procurement strategy to all employees and commit to driving transparency and compliance throughout the organization.
Download our free whitepaper: The Complete Guide to Group Purchasing
Optimizing an organization’s procurement processes has an enormous impact on supply
chain efficiency. Buyers within the organization will spend less time acquiring what they need, while goods and services are more 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 visibility into the organization’s overall spend, making it easier to analyze and optimize.
Procurement professionals are constantly engaging with different stakeholders and suppliers across the globe. As such, they are in a unique position to identify vendors who can provide innovative products and services and, ultimately, give their organization a competitive edge.
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. This could be something as simple as ensuring parts and products are delivered in green vehicles or packaged with recyclable materials, for example. 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.