Keeping the Procurement System Working Like a Well Oiled Machine

Procurement is more than the process of finding, contracting, buying, and paying for products and services. In an effort to do all of these things and more in a way that creates a sustained corporate competitive advantage, most procurement organizations have built up systems of initiatives, each of which offers some improvement to their performance or results. This system of loosely interconnected disciplines and solutions drives procurement’s efforts through the procure-to-pay process and beyond.

Some of the most common procurement initiatives include strategic sourcing, spend analysis, supplier management, and risk management. In more mature procurement organizations, these may be elevated through category management or procurement transformation efforts. When there are systems that support each or all of these initiatives, an effort is made to integrate them as much as possible in order to allow information to flow freely and to minimize duplication.

Each organization must build bridges between their active initiatives. Although members of the same team pursue some or all of these initiatives simultaneously, their efforts are not always as synchronized as they could be. Investment of procurement time and resources must be validated based upon its ability to forward corporate objectives. When initiatives are run with equal emphasis and in isolation, they are prevented from achieving their full potential.

Does the company plan to grow through acquisition? If so, strategic sourcing and spend analysis will be high priority. When innovation is the focus, supplier relationship management may be the answer. Procurement teams often make significant investments in their initiatives, but once they are kicked-off, they are left to run their course rather than being strategically emphasized for their ability to make the most of the circumstances at hand. And as those circumstances change, procurement must apply them in the right combination.

Do you feel that your procurement organization pursues initiatives in a disconnected way, or are you able to allow the right connections between them and the prevailing supply environment? Share your thoughts by commenting below or tweeting @BuyersMeetPoint.

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