Procurement Leaders in Chicago: Exploring Procurement's Role in a New World

I’ve been enjoying the cold weather in Chicago for a few days, attending strategy meetings at Spend Matters HQ. Today I am at the annual Procurement Leaders Forum, held at the Palmer House Hilton.  In the UK, the event has been around for 9 years, and they continue to grow their reputation and brand here in the US as well.

The main part of the event took place today, with a decent turnout in attendees. What’s most notable is the senior crowd – chiefly with senior procurement role team members (CPO, VP, etc.) from companies across all verticals: practitioner speakers include those from Anglo American, Blackberry, Cigna, Cisco, EJ Gallo Winery, Guardian Life,  Ingredion, Metso, Owens Corning, Reed-Elsevier, SunTrust, Tate & Lyle, Timken and others.  

Generally speaking, based on my own impressions and from speaking with some fellow analysts, the caliber of attendees is a notch above what I've come across at other conferences.  

Sponsors and exhibitors include Ariba, Beroe, BravoSolution, Bureau van Dijk, CombineNet, Corbus, Coupa, Fullstep, Genpact, Iasta, LexisNexis, Paladin Associates, Procurian, The Smart Cube, TriplePoint, Williams Lea.  It’s a good array of firms providing supply chain solutions, many of which you can read more about on Spend Matters or Spend Matters PRO.

One of the sessions I attended today was a panel, focused on managing change and what procurement's role might look like in the future.   I enjoyed the debate and comments among the procurement executives from Metso, Owens Corning, and Tate & Lyle.  The discussion opened up around the mega trends shaping the direction of procurement for the future.  Here are some of my takeaways from the overall exchange:

  • There’s an important question regarding when we will start to become more international in our approach, rather than more American. Whether sourcing for export or local markets, our perspective needs to change as the footprint of our businesses is shifting eastwards.  Will we become more like the Chinese, or will the Chinese become more like Americans? It’s not clear.
  • In the near future, we will not be able to sell what is not sustainably made, which in turn needs to be incorporated into our supply chain, vendors and their multiple tiers
  • The need for speed (i.e., rapid execution) is accelerating. Slow will be dead
  • An energy revolution is happening. The cost of energy will become a much bigger factor in our lifetime (likely second after labor).
  • There are far more sophisticated risk mitigation programs that companies are deploying, around weather for example. In the case of the tsunami in Japan, the firm with the fastest response won.  You need to be able to anticipate. The horsemeat scandal in Europe points out that supply chain risk is tougher, and that multitier analysis is soon to be expected.  Obviously second and third tier in China are of concern, but risk is global.
  • The first transformation has to be around internal risk: how do you change expectations within your organization? How can you manage internal risk? As tempting and necessary as it is to reach out externally, you need to take care of business at home first.
  • There is now greater awareness of the multiple roles of suppliers. They can be customers, competitors, JV partners, channel partners, etc. The complexity of the commercial relationships is rarely visible to procurement.  Competency programs are needed around how to manage these relationships. For example, rotate new procurement hires and let them see the company's sales side.  And try being an advocate for your suppliers, especially the most strategic ones.
  • Spend and contract intelligence - e.g. if you have one supplier in multiple markets, is the supplier working off one contract or is it multiple?  Contract visibility shouldn't be so hard to come by.


I’ll share some additional comments from the event and panel discussion next week.

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