ATTRACT. With that acronym, Joseph Sandor, professor of supply management at Michigan State University and chairman of the Procurement Leaders Forum in Chicago, summarized the major points of the first three presentations of the day today. The Forum - Accelerating procurement’s performance to increase shareholder value - is being held in Chicago at the historic Union League Club.
The "A," he said, represents the need for procurement to be attractive to business stakeholders and suppliers. The rest of the acronym stands for talent development, total cost of ownership, reduction of waste and risk, the use of analytics, collaboration, and growth of top line revenue. Each of the speakers touched on those essentials.
And those essentials were symbolized in the theme of keynoter Hans Melotte, CPO of Johnson & Johnson, who spoke about procurement’s goal at the health-care company of enabling growth for, with, and through the businesses.
Procurement at J&J is decentralized, he said, and while he sees the need for some centralization of some aspects of the function, that decentralization facilitates the business-centric model of procurement.
Executive management at the company, he said, recognizes that while cost reduction is always important it isn’t the most important goal for procurement. And that understanding, Melotte said, has helped procurement shift the discussion with its suppliers from "here’s what we need" to "here’s the problem to solve".
As a tool in that shift, J&J has implemented a supplier-enabled innovation portal. It’s a place where the company posts problems and suppliers are encouraged to offer suggestions. He said the portal is new and he will be watching to see how it works.
More than 200 procurement executives are attending the Forum, 25% more than last year’s Chicago Forum.
Paul Teague is US contributing editor of Procurement Leaders. To subscribe to the magazine, click here.