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Getting your procurement function in shape for 2015

Ian Ingram
Feb 13, 2015 4:12:00 AM

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Fitter, faster procurement

Traditionally the aim for many of us at the beginning of the year is to get fitter; but this doesn’t just mean getting a beach body. Businesses the world over are looking to get into shape for the New Year too. Toning-up processes, cutting slack and beefing-up innovation are priorities that are making their way to the top of the agenda for many leaders for the first quarter of 2015. However, a word of caution, getting your business in shape doesn’t necessarily mean getting “lean”. There are better ways to create fitter, faster, functions for the year ahead.

The procurement team of the future

Getting in shape for 2015

For procurement in particular, whilst the same old concerns around savings inevitably remain an important focus for CPOs – many acknowledge that getting their function in shape for 2015 will include a number of diverse challenges. From improving risk management processes; to mastering innovation driven procurement; to making the most of limited resources. The key to overcoming these challenges will be both adaptability and an ability for procurement teams to go above and beyond their traditional roles in the pursuit of success (as the below animation shows).

Another important focus for CPOs looking to develop their function this year will be to ensure that they look to bulk-up their team. If not by building muscle (increasing headcount); then at least by expanding the skills, knowledge and responsibilities of the current team. The procurement team of the future will be a diverse and well-developed team with experience in, and individuals from, a variety of different backgrounds and industries. This mix of skills, approaches and attitudes will enable the procurement function to better support the business in achieving its wider objectives.

Getting the competitive edge

A recent article in the Harvard Business Review entitled “Your customers’ behaviour is a competitive advantage” explored the idea that while educating and improving your employees is “smart business”, so is developing your customers and clients. For procurement, this can also be true of suppliers.
A supplier that has a collaborative, open relationship with your procurement function is more likely to display behaviours that are conducive to the success your company. Encouraging and coaching your suppliers, facilitating new business opportunities either through your customers or otherwise, and most importantly, treating them with respect (hopefully in the process of becoming the customer of choice) could mean the difference between any supplier-led innovation being harnessed by your company, or your competitors’. Some of the most successful CPOs agree that procurement’s ability to engage with suppliers in a positive and encouraging way should be the beating heart of any strategy.

Going for gold

Clearly then, getting your function in shape for the year ahead will not only rely on your team’s ability to adapt quickly and willingly to demands and challenges as and when they arise; or on the ability of the function management to develop and build on the skills and knowledge that its team members have; but for the procurement function to develop even closer, more encouraging relationships with its suppliers. Those functions destined for success will be the ones that support, engage and encourage supplier-led innovation.

What steps are you taking to get your procurement function fit for the year ahead? Are you slimming processes, bulking up your team, or encouraging everyone to work fitter, faster, and stronger?

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