Posted: Tuesday, May 01, 2007, 4:01PMOur profession is about more than cost-cutting - Price is not the only factor in excellent procurement.
Our profession is about more than cost-cutting - Price is not the only factor in excellent procurement. Mark Perera, EDITOR-IN-CHIEF.
There are times when everyone seems to stop and ask what they are doing and whether there might be a better way. Now seems to be that kind of moment. Several influential people seem to be asking a few basic questions about the purpose of procurement which centre around the debate over cost-cutting. Leading the argument in favour of cost-cutting in this issue is the research group Aberdeen. “Tangible cost savings”, says Aberdeen, basing its claim on a survey of procurement leaders, are “by far the most important value metric”.
On the other side of the table is the Germany-based consultancy BrainNet. In their report, also based on a survey and revealed exclusively in this issue, they say procurement leaders should be responsible for a lot more than savings. Making a point often heard in discussions over the vexed question of producing savings and proving “bottom line results”, BrainNet point out that “you can't go on squeezing the same lemon over and over again”.
There is only so much that concentrating on the monetary value of a relationship with a supplier can achieve. In a lucid account of his “working relationships index”, John Henke of Planning Perspectives describes his work with several major automotive companies. The best relationships appear to be based on mutually-positive attitudes – in which pressure to cut costs is far from the key factor.
Robin Jackson of ADR International calls in our letters page for a campaign to educate management that, “excellent procurement is not just about price”.
Elsewhere in this issue, a major survey by leading consultants McKinsey, also revealed exclusively by ELP, claims people count more than technology. What really matters is how talented procurement people are, how well motivated and how effectively they interact with others in their organisations. They can then have influence beyond their traditional responsibilities in helping to create revenue, encourage innovation and leading commercial change.
In our profile slot for this issue we went to Bonn to interview Dr Hugo Eckseler at Deutsche Post World Net. He is someone with a broad view of procurement, gained from wide experience in all parts of the supply chain. His experience in a company in the process of broadening out from a traditional nationally-based industry into a major player on the world stage makes for some very useful insights for the modern procurement leader.
We also highlight the shortlisted candidates in the first ELP Awards, which include some of the best-known companies throughout Europe. I really look forward to meeting our readers at this prestigious event in London and revealing the winning individuals and teams. I will also look forward to meeting many of you again at the latest ELP Forum which will take place the following day, also in London, and catching up with the latest ideas from the world of procurement.
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