I strongly dispute your statement that Procurement is not sexy...
We may not be customer-facing but we are supplier-facing... Let's not forget the cost of goods/services purchased typically represents a large percentage of the final cost of a product. In manufacturing, we're talking 40-60% of the final cost of goods sold.
If being responsible for at least half the costs of the business isn't sexy, then I guess I don't know what that term means 😅
In my opinion, the best ways to practically action the two points you mention are:
1. Jointly define what 'value' means for your different business units (hint: they will all tell you something different and price will only be a portion of the story).
2. Design your policies, practices, processes and systems to maximize value as defined in these various conversations (this is where Category Management comes in).
Great Procurement functions are masters of these different value definitions and the complexity it brings about.
For #2, conferences like DPW help you engage with the ideas and experts that can help you determine the 'art of the possible' with the current state of technology. Engage and you will be rewarded.
You are so right, Joël! Of course, procurement is the sexiest of all business functions, as I learned at DPW.
You offer excellent advice that all should heed--to define "value", you have to listen to the stakeholder you're creating it for (in this case, the business units served by Procurement), and design your work to maximize that value creation.
And for #2... I'm glad that DPW was an opportunity for you to expand your "art of the possible", and that I was able to be a small part of it!
Great post! There are two corporate departments that are frequently under valued, poorly understood, and leveraged: procurement and HR. The first is seen as a pass-through service and the second as protection from law suits. As a result, their tactical and strategic contributions are often wasted at the cost of weakening transformation and undermining competitive advantage. Both functions should be reconsidered from different frames of references as tactical and strategic assets.
Glad you enjoyed it, Ozzie. I completely agree. No internal function should be managed without a strategic focus (that's what outsourcing is for!). Their potential value to the organization is too important to ignore.
As the head of the spear in sustainability, procurement must lead the charge in driving environmental and social responsibility. With the EU's recent regulatory changes, such as the Green Deal and the Circular Economy Package, procurement must adapt to ensure compliance and seize opportunities for innovation. To achieve this, procurement must develop DX skills in order to provide traceable and auditable sustainability data, harnessing digital technologies to reinvent traditional ways of working. By doing so, procurement can enable sustainable growth and reshape the future of the organization. It's time for procurement to boldly step up to the challenge and wield its influence to create a more sustainable future.
Great post David.
I strongly dispute your statement that Procurement is not sexy...
We may not be customer-facing but we are supplier-facing... Let's not forget the cost of goods/services purchased typically represents a large percentage of the final cost of a product. In manufacturing, we're talking 40-60% of the final cost of goods sold.
If being responsible for at least half the costs of the business isn't sexy, then I guess I don't know what that term means 😅
In my opinion, the best ways to practically action the two points you mention are:
1. Jointly define what 'value' means for your different business units (hint: they will all tell you something different and price will only be a portion of the story).
2. Design your policies, practices, processes and systems to maximize value as defined in these various conversations (this is where Category Management comes in).
Great Procurement functions are masters of these different value definitions and the complexity it brings about.
For #2, conferences like DPW help you engage with the ideas and experts that can help you determine the 'art of the possible' with the current state of technology. Engage and you will be rewarded.
You are so right, Joël! Of course, procurement is the sexiest of all business functions, as I learned at DPW.
You offer excellent advice that all should heed--to define "value", you have to listen to the stakeholder you're creating it for (in this case, the business units served by Procurement), and design your work to maximize that value creation.
And for #2... I'm glad that DPW was an opportunity for you to expand your "art of the possible", and that I was able to be a small part of it!
Great post! There are two corporate departments that are frequently under valued, poorly understood, and leveraged: procurement and HR. The first is seen as a pass-through service and the second as protection from law suits. As a result, their tactical and strategic contributions are often wasted at the cost of weakening transformation and undermining competitive advantage. Both functions should be reconsidered from different frames of references as tactical and strategic assets.
Glad you enjoyed it, Ozzie. I completely agree. No internal function should be managed without a strategic focus (that's what outsourcing is for!). Their potential value to the organization is too important to ignore.
David, Absolutely!
As the head of the spear in sustainability, procurement must lead the charge in driving environmental and social responsibility. With the EU's recent regulatory changes, such as the Green Deal and the Circular Economy Package, procurement must adapt to ensure compliance and seize opportunities for innovation. To achieve this, procurement must develop DX skills in order to provide traceable and auditable sustainability data, harnessing digital technologies to reinvent traditional ways of working. By doing so, procurement can enable sustainable growth and reshape the future of the organization. It's time for procurement to boldly step up to the challenge and wield its influence to create a more sustainable future.