Having held a senior position in a multi-billion pound business for 10 years I never thought I would ever return to business after children to work in a small procurement consultancy still in the infancy of its development.
Topics: Our Team
If your procurement team took steps to reduce the total cost of ownership for a piece of equipment, they’d probably deserve a pat on the back (at least!).
But what if they took a further step and looked at the function of that piece of equipment and determined a better way?
Procurement teams are generally assessed on their ability to meet budgets. But if they hit their target every time, does that mean they are really good at their job, or that the spend target is too easy to achieve?
Should you be asking your procurement team to cut costs even more, or should their success be more closely aligned with company goals and driving shareholder value?
Clearly, when margins have been cut back several times there comes a point where simple cost cutting cannot be achieved. As a consequence, the more astute procurement teams focus instead on ways to impact total cost of ownership, overall profitability, business competitiveness and other elements that drive shareholder value.
To test whether your team has made that leap and moved away from the traditional procurement role into the more dynamic, mission-critical role that your business needs, try this simple checklist:
"Best practice" is a phrase that can be over-used, but nonetheless sought-after by all concerned. This list combines suggestions from the top industry gurus - including our modest selves!
Property directors and facilities management companies are always under pressure to reduce costs in everything that they do, but there often comes a point when a cheaper alternative fails to deliver the service that is required.
When I tell people that my passion is procurement, most people move on to ask the person next to me what they do for a living. A few others ask questions about the biggest tender I have ever dealt with, or how I feel about supermarkets bullying tactics with food growers and the like.
The uninitiated think that as procurement professionals we spend our time creating tender documents and beating up suppliers on price.
In fact, nothing could be further from the truth.
Our approach is VERY different.
Today's procurement teams are being challenged to reduce costs, but in many cases are finding that suppliers have no further room for negotiation.
The $3.7bn Tesco Booker takeover was a great example of disruption in the food distribution marketplace.
We worked with a national builder and cut £millions off their cost base, moving their business from being uncompetitive to one of the most profitable in the industry.
Procurement consultants aren't usually challenged with driving business innovation.
More likely, they are charged with reducing the bottom line financial figures.