Blog

Disruptive procurement is the process of creating real business value and competitive advantage by:

• deconstructing what the business really needs,
• challenging established business processes,
• leveraging knowledge from outside the normal points of reference, and
• designing, assembling and managing the supply chain in new and innovative ways.

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.

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, risk reduction and other elements that drive enterprise 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:

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.

Today's procurement teams are being challenged to reduce costs, but in many cases are finding that suppliers have no further room for negotiation.

After round upon round of cost reduction projects, the traditional approaches are running out of steam.

As procurement consultants, we are always looking for great examples of disruptive procurement in action.

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.

Procurement has traditionally been seen as a back office department. But there is an increasing desire for procurement professionals to make a big impact within a business.

While in-roads have been made, there is still a lot of work to do to make procurement a driver of strategic change.

In this webinar it was discussed how 'Disruptive Procurement' can be used by procurement professionals to deliver that change.