Professionals working in procurement and supply chain jobs will fail in their quest to achieve effective procurement transformations unless their managers undergo a change in mindset, an expert in the field claims. Procurement veteran, Joe Payne, writing in The Strategic Sourceror, says that there is a good reason why most procurement transformation initiatives “come up short.” Those in charge of these initiatives have often paid insufficient attention to the goals of what they’re seeking to achieve.
Noting that, until recently, procurement functions were an afterthought in many organisations, Payne describes how, typically, pressure would suddenly be put on procurement teams, from permanent employees to supply chain and procurement interims, to achieve cost reductions only after leaders had opened the books and discovered how much they were spending across their supply chains. Procurement practitioners would then be expected to do little more than approach suppliers and push for lower costs. This made procurement reactive and inefficient, according to Payne. He believes that business leaders, led by CPOs, should think about organisation-wide change, not simply pressurising practitioners in supply chain and procurement jobs to do more cost cutting.
This is the change of mindset he believes is the key to the success of procurement transformation initiatives – and it’s organisation-wide, not confined to the procurement function: “Organizations can’t just come down on their procurement team and demand better results. They should instead focus on implementing initiatives that will result in something more long-lasting than a temporary price cut from suppliers. Procurement does, however, need to take the lead in finding a process that the whole organization can buy in to.”
Procurement leaders, he says, should abandon ‘standard’ approaches and instead ask stakeholders throughout the organisation how a new approach would make sense for the organisation, one that takes account of each stakeholder’s end goals and clarifies how they will go about achieving them. No single department has a monopoly on knowledge, but together, a more complete picture can emerge.