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22 May 2013 | Paul Snell
Procurement professionals need to address the issues that keep chief executives awake at night to increase their corporate standing, according to Stefan Dent, director – advisory services at PwC.
Drawing on research from the PwC annual global CEO survey, Dent identified five propositions purchasers could make to senior management to boost their position.
“We should be knocking the door down to the CEO, and saying we have listened to you, we understand you, got inside the corporate strategy, seen it from your side of the fence – not just from procurement – and we think we’ve got some propositions that will be of interest to you that directly link to your agenda,” he told delegates at the CIPS Middle East Conference in Dubai.
The five business priorities buyers could help with were:
● Disruption. With CEOs concerned by disruption such as social unrest and natural disasters, companies need agile and resilient supply chains. Not only to deal with problems, but to be able to take advantage of opportunities created by the chaos.
● Customer experience. This is the top priority for CEOs worldwide, but do purchasers understand how procurement activity touches the customer – directly or indirectly – and are they focused on this end result?
● Operational effectiveness. Chief executives are willing to invest in this, but want more than just cost reduction. Have all areas of spend in the organisation been examined for potential savings? And have opportunities for outsourcing been considered? So “if the CEO comes knocking, are we ready to respond?”
● Strategic alliances. Businesses are moving away from traditional mergers and acquisitions in favour of supply chain collaboration. Is procurement finding partners to work with, leading the alliances, and identifying supply chain synergies?
● Top line growth. “In order for procurement to take to the next level, and communicate with the CEO we need to be thinking about top line performance,” said Dent. “How can procurement impact on revenues, operating margin, customer experience? But it needs to be built on the platform of an agile and resilient supply chain.”