Procurement transformation is an ambitious journey to achieving procurement’s purpose, vision, mission and objectives. This transformation journey will be multi-year, enhancing capability, incorporating new roles and a new mindset. Crucial will be the alignment with internal business partners to connect end customers to the supplier network.
In addition to economic influences, individual customer needs play an important role as drivers of the procurement transformation, because their satisfaction is the first priority for a company to thrive and should therefore be anticipated in procurement.
Those who really want to sustainably change procurement in a sustainable way should establish a goal for procurement’s role on a three to five year horizon. This role can be quite diverse. Will procurement be an innovator, and together with Research & Development teams, take the company into the future through new product development and introduction with suppliers? The focus here is on competencies such as cooperation in early stages of development or targeted technology scouting in critical supply markets.
The traditional procurement role as cost leader with the responsibility of efficient, cost-effective procurement requires other core skills, from cost modelling to systematic demand management and advanced negotiations. Only with the use of the right tools and analytics can the commercial effectiveness of procurement be increased further.
When translating purpose into the operational goals of procurement, for example availability, costs, value contribution, as well as innovation and sustainability, it is important to concentrate on the goals which the entire team is focused and working on. This can look very different depending on procurement’s purpose. It is important that both the purpose and goals are aligned in order to improve procurement and company performance.