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Survey highlights big changes in role of procurement
The role of procurement is on the brink of fundamental change, according to senior executives in European companies.
In the next five years the function’s role will become one of managing external supply chains, they predict in a survey. But the authors of the survey report warn that procurement directors must develop broad business skills to make the most of their role.
The research carried out by supply chain management consultants Efficio and the European Leaders In Procurement Network found that dramatic changes had already taken place in recent years.
Asked about their current role compared with six years ago, 90 per cent of those answering the survey said it was a strategic function with sponsorship from top management. This compares with only 19 per cent who said it occupied such a position in 2000.
The likelihood of procurement departments adopting SRM techniques in selecting suppliers had doubled in the same period, and there had been a “dramatic” increase in the amount spent on low-cost country sourcing.
A total of 279 senior executives, most with regional or global responsibilities in large European companies, answered the online survey over the summer. More than two thirds said procurement’s role would change to one of managing external supply chains in the next five years.
The survey’s authors say it shows procurement has already changed in most organisations from a mainly transactional back office role to a more central, strategic news analysis events research inbox email your procurement news to function with executive-level reporting lines.
But they say there is still much more to be done to integrate procurement with its business partners, extract value from suppliers and attract the talent required to take a broader commercial role.
Efficio’s chief operating officer, Alex Klein, said: “It is clear that procurement has come a long way in a short time, but there is still some way to go before it really matures into a fully strategic business function. Procurement directors need to develop their skills in managing complex supply chains and focus on value rather than cost.
“Procurement people must be seen as multitalented business problem solvers, rather than
developing a narrow professionalism that can lead to a sense of being apart from the rest of the organisations in which they work.”
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