Posted on Wednesday, June 8, 2016 by Breelyn
Do you ever find yourself staring off into space in a procurement department meeting wondering how Cristiano Ronaldo, Lionel Messi, or Marta would conduct themselves in a similar situation? Although it may seem like corporate purchasing and professional soccer are fields apart (perhaps one with greener grass), world-class players - aka, footballers - might actually have a lot to teach MNEs. For example, determination, patience, leadership, relationship-building, and a commitment to at least 10,000 hours of work are some points of commonality.
Don't worry, this blog won't be a guilt trip if your team isn't currently sprinting towards 10,000 hours of work.
According to a study conducted by The Hackett Group, world-class procurement departments are able to operate with 20% less costs than the average company, and they're doing this with 27% fewer employees. So what kind of strategies are these organizations implementing that set them up to be the award winners of corporate spend?
An entire company relies on the goods/services obtained by a procurement team, so all members must have effective communication with management. This ensures that objectives are aligned, budgets are realistic, and the purchasing workflow is as smooth and transparent as possible. The organization is free to play offense at full capacity when a procurement team is in sync with the management.
If optimal, a buyer-supplier relationship will be mutually beneficial. So rally your procurement team to support supplier innovation! This means reduced costs for goods/services, improved shipping options, and high-quality suppliers with greater drive to remain loyal. A desire to continuously improve fuels both the buyer and the supplier in this arrangement.
Analytics can be easily accessed and used to identify maverick spending while informing future purchasing decisions. A supplier's performance can be tracked and rated, POs can be viewed over a given time period, latest purchases can be updated in real-time, and more. In 2016, failing to take advantage of data may result in a penalty on par with ignoring the advice of a coach.
The best procurement teams are able to see beyond their own movements and anticipate the effects of external forces. In the next few decades a high number of retiring baby boomers have to potential to create a deficit of knowledgeable professionals. Procurement departments deemed to be 'world-class' are proactively monitoring market trends and scouting employees to fill the widening gap.
Technology options can feel overwhelming, especially when many procurement teams approach the challenge from the wrong end. Organizations functioning at an optimal level begin the process by identifying those systems that need improvement, and then proceed to select the technology that best suits their needs. Avoid being sidelined by tech pressure when you should be thinking 5 moves ahead.
Best-in-class procurement teams that are interested in scoring the game-winning goal must guarantee that their purchasing is environmentally-friendly and sustainable in the long-term. Both buyers and consumers are now considering these factors when selecting suppliers, so companies that don't make a green commitment will quickly lose their competitive edge.
Communicate to build a better buying system.