What Makes Procurement Leaders in Today's Market?

Supply Chain Digest recently posted an article that does a good job capturing some of the metrics in a relatively recent AT Kearney study that suggests what separates out leaders from the rest of the procurement pack. While there are no real surprises when it comes to some of the higher-level findings (e.g., leaders have more spend under management and save more -- duh), many of the in the weeds factors that leaders have in common are more insightful. For example, leaders tend to focus much more on performance measurement across contracts, spending and supplier collaboration. They're also "twice as likely to measure procurement's effectiveness in terms of risk and supply chain security, sustainability and innovation".

Leaders also go past the standard set of activities that have come to define much of procurement investment and focus in the past decade including sourcing, category management and investments in basic supplier relationship management. But if these initiatives are just the ante, what else do leaders do? "They employ new techniques with their suppliers, including innovation networks, product tear-downs, collaborative cost reduction and price benchmarking ... [and] are more likely to use collaborative design initiatives with suppliers, or to work on common strategies," Supply Chain Digest notes, quoting the ATK study. All in all, the summary of the study is not a bad set of basic suggestions that separate out leaders from everyone else.

Yet taken out of context, individual factors in studies like this can prove misleading, especially if followed independently of others or not under a broader transformation umbrella. Which is why, if you're serious about making investments to take your organization up to the next level of Spend Management maturity, that it's important to work with advisors like AT Kearney and Hackett on a one-to-one basis to define and structure the right set of investments and changes before going after individual programs.

Jason Busch

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