Tomorrow, we'll be dropping by a joint Corporate United and BravoSolution event in Chicago: Changing the Game: Evolving Procurement to Become Vital to Your Company. Mickey North Rizza is presenting on the concept of "moving procurement to a vital, relevant and valuable function." The topic is one that goes beyond strategic sourcing to encompass a broad range of supply management topics.
I suspect Mickey will touch on a topic I've heard quite a bit about from her in the past – the importance of moving the discussion of procurement's contribution beyond looking at just profitability (with a revenue and cost focus) to also looking at overall return on investment including exploring working capital and fixed capital opportunities. As procurement organizations become more competitive, they often have the opportunity to tackle the ROI-focused areas more effectively.
Here, as Mickey points out, the value creation opportunities can span a range of areas including, in her words:
- Less inventory, increase inventory turns
- Improved DPO
- Shorter order to cash cycle times
- Fewer physical assets
- Improved demand visibility
- Increased supplier liability
- Network transparency
Increasingly, Spend Matters believes that some of these areas, which have traditionally been part of a supply chain management orientation rather than procurement, will increasingly become core to supply management, including strategic sourcing and general purchasing process and focus. Stay tuned as we report on her talk and others later this week!