Today, I would like to welcome a guest blogger to Spend Matters. Philippe Courrègelongue is the director of consulting for Emptoris EMEA, and he has offered to write a two-part series on procurement, globalization, and insight from the CPO Agenda Discussion Series which took place in Europe earlier this year.
Over the past six months, CPO Agenda magazine held a series of roundtable sessions across Europe which examined trends in global procurement at Global 2000 organizations. I was lucky enough to participate in several of these sessions, as a representative of Emptoris. All in all, senior purchasing executives from more than 100 companies participated in these conversations.
Jason Busch summarized a few of the topics that jumped out to him in an earlier post -- and I asked if we could contribute to the discussion by sharing what we saw as the key themes that came out of the sessions. You can read the full discussions here.
Aligning Procurement with Corporate Strategy:
The first overall theme to emerge was the need to align procurement more closely with corporate strategy. Although this sounds simple, most participants recognized that the involvement of procurement into strategic planning was recent -- while the challenges at hand had an increasingly critical strategic nature. The steep increase of many commodity and energy prices combined with the competitive necessity to rebuild supply chains globally certainly played a key role in the promotion of procurement to the C-level. However, more importantly, many at the sessions pointed at supply risk management, and fostering and controlling innovation, as how they now would contribute to corporate strategy.
Getting the Basics Right:
The second overall theme was "operational excellence" or to put it more simply, "getting the basics right." It was refreshing to hear senior procurement execs reiterate relentlessly the importance of execution. Classic themes were discussed: putting spend under their control; establishing discipline as well as service level agreements with their internal customers; and benchmarking their performance against best-in-class.
Perhaps the most interesting topic discussed was coping with increasing demand for agility of procurement: being able to shift focus of entire teams, suppliers, and contracts to respond to shifts in demand.
Enhanced spend visibility and effective contracts and compliance processes were discussed as fundamental to achieve such agility.
Security of supply was another hot topic -- and another example of "operational excellence" that was discussed. Participants from high tech companies as well as more "traditional" manufacturing and FMCG companies stressed how critical flawless processes and smart technology had become to the security of their supply chain
Turn in next week for more information from Philippe Courrègelongue on procurement in a flat world and the impacts of globalization.