Transformation towards a competitive procurement function - part 1

Thought Leaders is a series of regular posts from experts from across industries and regions, looking at the issues procurement faces today. This is the first in a sequence of posts by former Deutsche Post DHL CPO, Hugo Eckseler looking at the different facets of a procurement transformation process.

There are few corporate functions that have been hit harder by the rapid changes in today’s industrial world than procurement…

Product life cycles are getting shorter and shorter and the hunger for new and innovative features is ever increasing - smart-phones and tablet computers being just the most visible spearheads of a development across many industries. Being ahead of competition requires an intimate knowledge of all relevant technology trends and the ability to integrate them into the development of new products - with shortened time-to-market, top quality and at competitive cost.

Companies will be able to win the race only with strong partners and suppliers, linked with each other in often complex supply networks that need professional orchestration. I guess nobody will disagree: this is a natural and fascinating job for procurement managers who are able and willing to cope with the challenges of such a multi-dimensional environment. It goes without saying that such a job requires a new profile of functional and social skills - from innovation management, business partner relation management all the way down to the ’good old’ negotiations skills.

Getting and maintaining the competitive edge will in many cases not leave your own company’s morphology untouched...outsourcing, mergers and acquisitions may change the organisational structures massively - and that does not stop at procurement. I had the privilege to be part of the transition of DPDHL on its way from a national company focused mainly on Germany to a global logistics player operating in more than 200 countries.

The international growth was driven by the acquisition of several multi-billion Euro companies which has to be integrated within a few years, including the creation of an effective and efficient global procurement organisation across all divisions and countries. This was an exciting and challenging transformation task for my management team that required clear visions, assertiveness and the ability to balance corporate and divisional aspects, central versus local options, etc.

Today, a situation like that is more the rule than the exception in multi-national companies and CPOs must be true change managers who lead their organisations through difficult times. This refers to the selection and development of procurement ’entrepreneurs’, but it includes all other elements of the "House of Procurement" like procurement strategies, organisational alignment with business partners, professional category management as well as processes, systems and tools.

In my next blogs I would like to share with you my point of view what’s critical to transform procurement to a service partner of ’first choice’ in the years to come. It will be based on my own experience from many years in supply chain management but as important for me are the views of young professionals on what will drive the future of our profession.

Let me know your thoughts.

You can reach the author by clicking here [www.eckseler-consult.de]

Hugo Eckseler works today as senior consultant for procurement and supply chain management - after more than twenty years as CPO and manager in manufacturing, logistics and quality at Deutsche Post DHL, 3M, WELLA and other multi-national companies. You can find his coordinates here.