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#ProcurementCan do a lot of things. Some of those things though might just surprise a few people sitting elsewhere in the business, who up until now will have been oblivious to the function and the value that it can deliver both through cost savings and new innovations.
So, setting our sights on the possibilities of procurement, just what can the function do?
In the wake of the financial crisis many businesses looked to cost cutting as a way to keep themselves out of trouble. Procurement was called upon to drive this forward and the function won a lot of plaudits for its achievements. As some industries find themselves hit by falls in spending and slumping commodity prices the search for more cuts goes on. Procurement will once again be called upon to help the search and deliver those now hard to find savings.
While businesses will look internally for those cost cuts they will also look externally towards the supply chain. Fears will rise that they will cut off the investment tap and squeeze suppliers on costs. Procurement is too long in the tooth to know the damage this can cause though and will fight to ensure it doesn’t
“This is an unique opportunity to restructure the way things are done, and find innovative ways to reduce the overall supply chain cost structure. This will not only ensure that companies survive this crisis but will return stronger and more profitable when prices bounce back,” said one senior procurement executive in a recent feature on supply chain investments.
Technologies that fundamentally change the way businesses operate and manufacture goods are coming and they are coming soon. 3D printing, artificial intelligence, the Internet of Things (IOT) will shake things up and it is procurement who will be at the forefront of implementing these technologies within the supply chain and ensuring that they reduce risk and improve the speed of the business.
Food giant Kellogg’s identified Asia and Africa as two key growth markets. To achieve that the company required a number of regional procurement teams filled with talent who possessed the understanding and knowledge of those markets. It wasn’t just a case of procurement hiring a few local people though and setting its own targets and beginning the project on its own. The function had to first understand what the businesses goals were, then plot a course to get there. Only then was the business able to truly grow in those markets.
In CSR, the best are getting better and the rest are getting worse, according to new research from Procurement Leaders. Those efforts are being lead by procurement.
The report found that the gap between the top performing companies and the rest of the pack is widening. This trend is seen across all five of our investigated areas: human rights, environmental protection, community development, fair operating practices and labour rights protection.
A slump on Wall Street presided over a dismal first quarter of the year in which every one of the world’s top-five investment banks endured negative earnings growth. Net income took the biggest hit, with combined profits falling by 26% compared to 2015, which highlights the banking sectors’ continued struggle against a rising tide of costs. Tried and tested procurement levers are emerging as the key to stimulating improved performance. New areas of the banking value chain will be outsourced alongside a rationalisation of spend in core categories, including trading technologies.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.