Procurement’s Role in Today’s Business World

Often times I am asked the question, “what is it that you do for a living?”  I respond by saying that I work with suppliers of my company to make them better so that we both can be better for our employees and customers. The response generally garners a few strange looks and the person I’m speaking with then usually says, “So, you buy stuff, right?” 

Well, I am here to say that this is a particularly old view on what role Procurement professionals play in a company. Today a Procurement professional must constantly be ready to lead change and, more importantly, listen to what the internal and external customers’ needs are to find the most optimal situation.

While Procurement has traditionally been thought of as the price chasers and part chasers, today’s world in which the Procurement pro operates is very different. As an example, in working with a technology company it was discovered that there were too many projects lagging behind the target dates for launch. This caused significant stress not only on the organization but more importantly on its customers. 

The team set out to improve how we acquired and deployed the resources needed to speed the projects along by developing a full workforce management strategy. We crafted a communication strategy that had input from many stakeholders and had the goal of engaging suppliers at a new level not seen before. During our conversations price was not discussed; the focus was squarely on having a better experience with our contingent workforce to help ultimately speed up product launch to market. That was the real value the team was seeking and it wouldn’t have been discovered by taking the old school approach of just trying to negotiate a better price with our key suppliers. I would be remiss in saying that as an added benefit our process did result in multimillion dollar savings. This certainly delighted our senior leaders; it was winning all around!

Another great example of value beyond price is when I was working at a family owned business   experiencing major quality issues which caused a life impact on its customers. You can imagine the seriousness of this, and I can assure you our teams’ main concern was NOT cost improvement in this specific scenario. The Procurement team gathered everyone around from Engineering, Quality, Marketing, and Sales to quickly assess the problem and engage the supplier to find the root cause and eliminate it. With an all hands on deck approach we were able to work with the supply base to contain the issue and understand why it was happening. We wouldn’t have been able to address this as quickly as we had if we were just looking to get a discount for poor quality parts. In the end, we protected our customer, saved the business, and developed a stronger relationship with our supplier’s which is what today’s Procurement pro should always be looking to do every day.

Lastly, one of the most important ways Procurement has shifted its approach over the years is in the areas of leadership and people development. Procurement is often seen as a talent factory within an organization due to developed skills in change management, project management, and collaborative cross-functional style. These are critical skills that are becoming more in demand in today’s business and we are being called upon to use them in a business partnership with our colleagues across the company. We must continue to put ourselves in a position where we can mentor, coach, and guide the next generation of business leaders. We can teach Procurement and Sourcing philosophies but the softer skills and people skills are more innate and have to be nurtured daily.

Whenever anyone asks what I do I will continue to respond with my answer of being a supporter of business improvement through the Procurement lens. Procurement has become a strategic driver for the business and should stay that way for years to come. And yes, I certainly can buy something for you and I will do a great job for you and your team in that regard, but I like to think of Procurement as a true business partner to uncover whatever is valuable to the organization and the individual asking for the help.