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Articles in category: Leadership
We’ve seen many years of debate over the best way to organise procurement within complex organisations. And the question of whether it is better to centralise or decentralise, hold or devolve power, is still one of the most heated talking points among procurement executives. Now, technology has evolved to a level that means we may no longer need to choose between one or the other, or indeed try to make both models fit where an organisation has a siloed, category-led structure in place.(Read Full Article)
A procurement professional is unique, maybe more so than their counterparts in finance or sales. Every business has different suppliers, different supply challenges and, of course, it needs a unique profile of expertise to deliver value in those circumstances.
The perception of procurement, which individuals and teams are working to dissipate, is often that buyers know everything about cost, but nothing about what suppliers are worth to the business. Undoubtedly that’s true in some cases, but where procurement can prove its worth is by knowing more than anyone else in the room about what the business is buying, why ...(Read Full Article)
Have your supplier relationships gone flat? Has the initial excitement fizzled out? 10 experts share their top tips to put the spark back into your partnerships.
Picture the scene: With the ink not yet dry on the contract, the enthusiastic purchaser and eager, hungry supplier get ready to celebrate the start of a burgeoning relationship. What could possibly go wrong? But leap forward a few years, and all is not well. Targets have been missed, innovation has stalled, and there’s an atmosphere of distrust between the two parties.
Sometimes, relationships with suppliers simply need freshening up, often as a ...(Read Full Article)
We have heard the rationale behind strategic sourcing for so long that you’d think the concept would be universal today, or at least widespread. Is it? Bob Rudzki doesn’t think so, and he has a theory of why it isn’t.
Back in the early 1980s, the venerable Harvard Business Review published an analytical piece by Prof. Peter Krajlic that called for a more strategic approach to purchasing. Even before then, some leading CPOs had been preaching the gospel of strategic sourcing.
Purchasers who aspire to be a chief procurement officer should make sure they gain a wide variety of experiences.
That’s the advice from Paul Jones, director of indirect procurement in Europe for Kellogg's, who said: “Gone are the days where I think someone should just work in indirect procurement. The best way is getting the real skill set to become CPO one day.”
Speaking at the ProcureCon Indirect conference in London yesterday, Jones said to reach the next stage of their career, purchasing professionals may sometimes have to move sideways or even down a step. “They have to ...(Read Full Article)
Indirect procurement teams need to make their voices heard within companies and strive to be a “beacon of excellence”. That’s according to Brian Davy, head of non-production procurement at Jaguar Land Rover (JLR), who was speaking at the ProcureCon Indirect conference in London this morning.
“Indirects can have an image problem,” Davy told delegates. “You need to be a beacon of excellence. If you think that you are a second-class citizen versus direct procurement, then you are going to get that reaction. We need to display what we’re good at, so much so we made a film of ...(Read Full Article)
This month’s ‘food for thought’ will be in keeping with the theme of managing stress. If you haven’t been following the past two weeks – I’d recommend that you visit my blog and take a look at how much your attitude towards stress can affect your health. We are going to see that having ‘choices’ might not be all it is cracked up to be.(Read Full Article)
Should procurement refer to stakeholders as ‘customers’? It depends on who you ask, it turns out, but there’s no lack of passion on either side of this strange argument.
Yes: Ultimately the procurement role is to acquire goods on behalf of stakeholders, and by doing so they perform a service to meet their stakeholders’ needs. All of which sounds quite similar to customers in this context. More often than not the stakeholder is responsible for the budget, as well as the specification of requirement and it’s the stakeholder who will ultimately be relying on the quality and consistency ...
Procurement leaders are expanding their priorities for 2014, moving beyond a historic emphasis on reducing purchase costs and adding focus on expanding and deepening the scope of spend influence as well as supporting supplier-led product innovation, according to 2014 Procurement Key Issues research from The Hackett Group, Inc.
The Hackett Group’s research reveals a major change in procurement’s priorities from last year, when cost reduction/avoidance was their number one concern. For 2014, the highest-ranked issue is expanding the scope of procurement’s spend influence. Over three quarters of the executives placed this first in their priority ranking.(Read Full Article)
Expanding procurement’s influence has overtaken cost control as the number one concern among purchasing professionals.
The Hackett Group’s 2014 Procurement Key Issues report revealed a “major change in procurement’s priorities from last year”, with more than three quarters of buyers putting “expanding the scope of procurement’s spend influence” in first place.
Tapping into supplier innovation was the second highest priority, followed by “deepening influence on complex indirect spend categories”, while cost-cutting – placed first in 2013 – dropped into fourth place.(Read Full Article)
Facebook’s acquisition of WhatsApp for a reported $19 billion (£11.3 billion) shows how procurement can get involved in high-risk high value projects, such as IT systems and major capital expenditure. Here are three points to inform your thinking: • Cost, price and value. The acquisition price of $19 billion has very little to do with cost because WhatsApp employs about 55 people and charges 69p in the UK for an annual service – it’s free for the first year.(Read Full Article)
For decades, certain health experts have turned stress into a public health enemy, yet new research suggests that stress may only be bad for you if you believe that to be the case. In other words, we are going back to what ancient wisdom has known for centuries, that stress is a matter of perception.(Read Full Article)
There are many skills required to bring about a consistent change in a function, but there are some qualities that leaders share.
In the latest article for our series The Financial CPO, BravoSolution’s Mickey North Rizza notes that reactive thinking is commonplace, but overcoming that and becoming strategic requires a change of mindset.
She writes: "To start this process, procurement must gain a solid understanding of the function’s performance to date, including self-assessment, and more importantly getting honest feedback from key internal and external stakeholders.
One of Procurement Leaders’ members is keen to learn more about supplier portals from the community and the scenario he posited gave insight into what can be a tricky area for functions.
He posed a question asking for advice from members about whether they are using a supplier portal and if so, whether it was custom built. He also wanted to know the best version of xml to use, and any advice about the Global Upstream Supplier Initiative (GUSI).
Whether the short term pain of introducing a specific new technology is outweighed in the longer term by cost and process ...(Read Full Article)
-->The most critical challenge we all face when managing poor performance, is preventing people from becoming demotivated. The idea behind performance management is to help employees ‘pull up their socks’ and put a spring back in their step but, sadly, the opposite often happens.(Read Full Article)
Impasse or deadlock in negotiations is a condition or issue that neither side seems to be able to agree on and it can bring the entire negotiation to a grinding halt.(Read Full Article)
-->There is a wealth of published information available about how to manage the commercial and technical content of supplier negotiations but little focus is given to how to handle the behavior of the participants, on both sides of the table.(Read Full Article)
A helicopter view of South Africa’s public-sector procurement system highlights not just its scale, scope and complexity, but also some of its key fragilities. Every year, departments and agencies across the three tiers of government spend more than R460-billion on procuring goods and services, ranging from automobiles for the police, to textbooks for schools and medication for hospitals.(Read Full Article)
There is a clear trend, both in terms of research and anecdotally, that companies are looking to centralise their procurement functions. Is this always the right path to follow?
We have recently published our research into Procurement Operating Models (you can access the executive summary here). One of the key questions of the study relates to impulse to centralise.
Clearly, this trend can be coupled with the dramatic rise of the procurement function. Even in established global brands, a dedicated purchasing department can be a relatively new emergence. The first remit of new CPOs, it seems, is to expand spend ...(Read Full Article)
Ten to 20 years ago, the supply chain leader in most companies held a title such as “vice president of logistics.” It was a largely functional role that relied on technical proficiency in discrete areas: knowledge of shipping routes, familiarity with warehousing equipment and distribution-center locations and footprints, and a solid grasp of freight rates and fuel costs. (S)he reported to the chief operating officer or chief financial officer, had few prospects of advancing further, and had no exposure to the executive committee. The way companies need to think of the modern supply chain executive has changed dramatically.(Read Full Article)
Despite her skiing injury, one meeting the German Chancellor, Angela Merkel, did attend was the first cabinet meeting of Germany’s new coalition government which took place in the second week of January.
An element of the government’s programme, which has been met with mixed reactions in Germany and beyond, is the issue of gender quotas on supervisory boards of publicly listed companies. The government’s decision to introduce mandatory 30% female representation is aligned with last November’s decision by the European Parliament to approve the implementation of mandatory quotas requiring 40% female representation for non-executive directorship positions ...
Early engagement is still an uphill battle: time-consuming and energy-sapping, with a high risk of no reward. Procurement isn’t invited to the party, it’s still waiting by the phone.
In this guest post, Procurement Leaders welcomes a call to action from Bill Young of Kestrel Ops - Procurement needs to get the attention of the business and it needs to think differently in order to do it, he argues.
Just 10 per cent of senior leadership roles in supply chain operations are held by women, according to research.
SCM World carried out a review of Fortune Global 500 firms with physical supply chains to arrive at the figure, and said the “time to break this problem down is now”.
The figure compares to other research that found 24 per cent of leadership roles across all business areas were occupied by women worldwide, with the most commonly held positions being chief finance officer, human resources director and corporate controller.
SCM World also conducted a poll of 150 global supply chain ...(Read Full Article)
2013’s biggest stories with the most impact on - or which hold the most potential for - procurement.
Virtually every business publication at this time of year reports on what the editors think were the biggest stories of the year. So, why shouldn’t bloggers and columnists do the same? Hearing no objections, here is my take on the two biggest stories with the most impact on - or hold the most potential for - procurement.