Procurement Leaders in Chicago: A Brave New Supply Chain World

A couple weeks back, I attended the Procurement Leaders event in Chicago. As part of the conference, I sat in on a panel discussion with Metso, Owens Corning, and Tate & Lyle. The panel discussion explored the topic of managing change and what procurement’s role will look like in the future. However, the debates were much broader than just procurement, encapsulating also supplier management, supply chain and various related areas. You can read my initial notes from the discussion in the first installment of this series.

Here are two additional thoughts I gleaned from the exchange, which can be extended to a range of topics we face every day in our jobs as procurement and sourcing managers:

  • There is a fun expression that a panelist introduced in the session: “Kissing the frog.” Essentially, the expression provided a means to explore the challenge of turning regular suppliers into strategic suppliers. That is, which ones are truly marriage material?
  • The panel rallied around the mantra “people, people, people, processes, then solutions.” Without getting the right people in place, the rest will not help across procurement and supplier management needs. The panel challenged the floor to define what capabilities are needed in the "sourcing athletes" of the future.

The panel concluded by reiterating some evergreen concerns:

  • Procurement is still often seen as a downstream function. And it’s everyone’s role and responsibility to change that.
  • One way to initiate change is to focus on value engineering with joint supplier engagement. Remember that there is no downstream that is truly worthwhile to dive into – 80% of opportunities are upstream.  Don't focus on saving in what you're doing; rather, focus on what you could be doing differently. And it’s time to take away the constraints by letting suppliers tell us how things can be done better.
  • Do sourcing teams have a seat at the most senior table? Are you at this table?  We must demonstrate how we impact the business as measured on the financial statements. And we must work toward changing internal financial standards so that more of the value that sourcing delivers is reflected in those statements.
  • Has technology innovation among providers stagnated?  What's the technology of tomorrow?  Has procurement technology kept up?  We need tools that drive and support savings validation. This is the Holy Grail; let’s work with Finance without spreadsheets.

 

We encourage Spend Matters PRO subscribers interested in this final topic of finance/procurement collaboration to check out Sievo, which is listed as one of our “Five Specialist Vendors You Must Talk to in 2013.”

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