My Top 10 Procurement Takeaways
My Top 10 Procurement Takeaways Business and career advice for procurement leaders
Joanna Martinez, CPO / Global Transformation Executive/ Founder at Supply Chain Advisors LLC
Images: Keynote: Redesigning Procurement for Agility, Tradeshift Digital Leadership Circle, New York, June 22
I've been fortunate to hold great supply chain and procurement roles that have allowed me to understand and contribute in different industries, often on client-facing teams, including Johnson & Johnson, AllianceBernstein, Diageo, and Cushman & Wakefield.
-Joanna Martinez, CPO
My Top 10 Procurement Takeaways
Traditional Procurement savings are getting harder to find. Weve had a great 25-year run of cost reduction with the same basic process. Its time for new tools and new types of value delivery.1
Recognize that unless you are in a direct manufacturing company, your firm got along quite well without formal procurement and can still do well without you.2
One of the best things we can do for our firms is to figure out how to turn on a dime. As processes become more agile, efficiency improves and cost comes out in unexpected ways. 3
Tidy supply chains exist only in textbooks. We shouldnt design for stability, we should design for messy, dynamic situations. 4
5How many times do you walk around the office and see someone who is trying to input a requisition, approve a requisition, or do something on the systems we have in our companies and they are tearing their hair out? That same person is buying shoes from Zappos at lunchtime. The systems we put in place years ago are aging and out of sync with todays digital world.
Procurement should take a bilateral approach to spend. Strategic sourcing makes sense for high dollar goods and services, but that tail spend usually represents many low value transactions and the emphasis there should be on speedy and efficient processing. 6
7During the recession, I lost my staff but was able to negotiate funds to hire subject matter experts on a per project basis. This ended up being a blessing in disguise because we created an agile organization without realizing it. When the economy improved, we continued with a significant agile component instead of going back all the way.
8When youve bonded with the revenue side of the business and you understand where your companys products are headed, you can turn to the supplier community for strategic assistance. Thats the kind of conversation your supplier wants to have, and that Procurement is uniquely positioned to support.
9Agility doesnt just apply to our process, we need talent agility as well. Categories are changing, such as software moving into the cloud. A CAPEX spend yesterday is OPEX tomorrow, with a different skill set required to support it.
10In the most forward-thinking firms, procurements value is measured on its overall contribution to the companys strategy, whether thats product innovation, cash flow improvement, cost savings, and anything that helps the company get to where it wants to be. Procurement must be focused where it counts.
Recognize that unless you are in a direct manufacturing company, your firm got along quite well without formal procurement and can still do well without you.