Gone are the days when procurement was all about dollars and cents. Contemporary procurement leaders are onboarding more strategic responsibilities, with cost savings now a driver of profitability.
But that’s not what most of them signed on for. Today, there are new challenges for procurement leaders. The demand for supply chain transparency, accountability and sustainability is just one of them. Companies are seeking new ways of delivering on the ethical commitments they’ve made to consumers and they’re recruiting procurement leaders to help them make that happen.
So, for procurement leaders, the rubber is meeting the road. But in these challenges, there’s also great opportunity for procurement professionals to become integral participants in strategic sourcing that does more than hold the budget line.
The role of procurement is being rapidly transformed and that transformation will only become more apparent over the next 10 years. Their roles are growing to encompass brand integrity and advocacy for sustainable supply chain practices. They’re becoming supply chain cops who ensure that what’s said at the top of the chain trickles down as practice.
And companies who adopt this style of managing procurement are positioned to exceed the efforts of those who don’t.
They’re learning to not only manage risk but to anticipate it. In a world of Big Data, this is how it’s put to superior use. The data garnered by the emerging transformation in procurement will play a huge part in that advantage, propelling the bold ahead.
Millennials driving change
As Millennials become the consumer market most sought out, their consumer decision-making process for will increasingly come to the forefront.
Part of that decision-making process concerns the ethical conduct of business with respect to where things come from, how they’re made and who’s making them. Not responding to this impulse is tantamount to waving on the shore, as your cruise liner makes a bead for the Bahamas.
This cohort is changing the way companies do business by demanding supply chain transparency and what’s more – a less disposable commercial landscape. They desire a world of reduced waste, the increased availability of locally-sourced goods and ethical practices abroad, when that’s not an option.
The numbers game
Procurement leaders would be well-served to start learning more about the way the money goes around and around. For now, their financial focus has been on simple costs for goods, services and all the nuts and bolts of getting them to clients.
To meet the extraordinary challenge of supply chains gone global, their financial skills will need to experience a rapid expansion. Already, there’s a trend toward integrating the emerging value of procurement with the skills of finance, creating a Center of Excellence which teams the two in common purpose. Companies are taking note that this alliance holds in it endless promise and explosive power.
To procurement leaders, all this will sound familiar. They may even be a little nervous about the challenges they’re facing. But they’d be well-served to remember that is procurement’s special day and to seize it.
CenterPoint Group is a trusted procurement advisor.