The Evolution of Procurement – Briefing Paper Available Now

You may or may not have caught up with our recent webinar with Comensura, titled “The Evolution of Procurement – Alignment, Flexibility and Procurement-as-a-Service”. (You can still catch up with that here).

Whether you did or not, we are pleased to say that our briefing paper is available with a similar theme, but a slightly different title.  The Evolution of Procurement and What it Means for Managing Contingent Labour , which was authored by Peter Smith and is available to download free on registration here through this link.

In the paper, he covers both some thinking about where procurement is headed in this world of “everything as a service”, and takes a look at how procurement is addressing that particular complex spend category (contingent labour) to meet the changing expectations of our stakeholders. Here is an excerpt, in which we look at how procurement is moving towards a more strategic positioning.

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Procurement Today

The focus on value and a more nuanced approach to procurement that has developed over the past twenty years includes establishing category management as a central element in procurement methodology and approach. That is important to note, as the need to look at each category (spend area) on its own merits, and ensure strategies are appropriate for the specific situation, is central to procurement success.

The strategic (and category-specific) approach, now aspired to by many buyers, could even mean, for instance, spending more in a particular area of third party spend, if doing so leads to improved internal manufacturing efficiency and a net benefit.

It could involve looking at demand and specification management, both of which can directly lead to cost reduction and other benefits. It is worth noting that cost reduction has not disappeared from the agenda, but by looking at internal issues, such as harmonisation of specifications, new opportunities for reducing costs have been realised as well as the use of traditional tactics such as aggregation and market leverage.

Other more sophisticated means include examining outsourcing options and decisions, and the ultimate aim for many leading procurement functions is to be seen as key players in helping to drive top-line revenue growth and profit – perhaps through capturing innovation from supply markets.

This move towards establishing a more strategic role has undoubtedly been a positive step for procurement – apart from other reasons, pure “cost reduction” must get more and more difficult as more expertise is applied and any surplus profit or waste is removed from the process. Cost in any given category can only be reduced to a certain point.

 

Download the entire briefing paper free on registration here through this link.

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