Tag Archives: procurement evolution

Is supply chain swallowing up procurement?

The pandemic thrust supply chain management and risk mitigation into the limelight. What happens to the procurement folks?

This article was originally published on Supply Chain Dive on October 22 2020 and is republished here with permission of the author and website.

Bonnie was quiet at dinner, and her father asked what was wrong. She said in school today, her 6th grade class was talking about careers and what their parents did for work.

Bonnie said her mother, Monica, was a senior buyer at a local electronics manufacturing plant. Other parents were small business owners, electricians, plumbers, teachers, members of local police and fire departments, and even a professional surfer. Bonnie’s friend Tyler’s father was a supply chain manager for an online marketplace, and the class voted his job “coolest and best.”

“Why can’t you get a cool job like Tyler’s dad, Mom?” asked Bonnie.

And that is one of the core problems in the procurement profession these days. The identity of the profession is changing, once again.

​Pandemic-related disruptions in consumer and industrial supply chains are making headlines, pushing the once relatively obscure work into the limelight. How companies manage their supply chains has become as important to a company’s success as financial health, market share and customer relationships.

And that is why many companies have reshuffled leadership, appointing managers from other functions to run supply chain operations. These managers often have limited or no procurement, planning or logistics background. The logic is that if the talented finance or marketing manager is now in charge of the supply chain, it must be important.

In many companies, this expanded universe of supply chain management, with leadership from finance or marketing functions, is swallowing up the somewhat independent procurement function. Rather than actively driving the supply side of the business, the function may again be relegated into a subservient support role.

But we can change that.

Acknowledge the change in the business climate

Companies have finally discovered the importance of the supply chain and are adding resources to shore it up. Supply chain management is also more customer facing these days, so adding an existing customer-facing leader may actually be the best thing for the business.

Some procurement leaders may feel they have lost influence or leadership. But the increase in importance and scope of the supply chain function should lift all participants. Consumer-facing businesses must address questions and concerns about the origins of their products. Are they sustainably sourced? Free of forced labor? Fair trade? Procurement holds the answers and can shine here.

Procurement professionals are a resilient bunch. Embrace the change and get ready to contribute in an expanded scope with certainly higher visibility.

Own procurement’s core responsibilities

Sourcing, supplier performance and managing supply chain risk are procurement responsibilities that aren’t going away. If anything, these critical functions are becoming more important.

Those new to supply chain management, or in existing functions like planning, distribution or transportation, may not fully comprehend the complexities of the procurement process and how tough it is to manage a full range of global suppliers.

This is a perfect time to reinforce our reputation in an evolving organization by doing our jobs very well and teaching others about the nuances of supply management.

Contingent Workforce: Why Procurement Still Hasn’t Found What It’s Looking For

In some ways the procurement profession is in a stronger position than ever before. But in others, in the words of great philosopher Bono, we “still haven’t found what we’re looking for” when it comes to the contingent workforce.  

Different Categories, Different Organisations, Different Value

Is our role really about cost reduction when it comes down to it? Or are we moving into a brave new world where the small, but perfectly formed, procurement function is focused on extracting innovation and competitive advantage from key supply markets?

Clearly, “value” is a word that has to feature, but saying procurement is about value is a bit of a truism;  of course it is! And so is everything else that an organisation does.

This in itself doesn’t help us to progress very far in the debate but one useful thought might be this: Every spend category within our organisation contributes value to the organisation in a different way; and for any given spend category, that value will differ from organisation to organisation too.

The Evolution of Procurement and What it Means for Managing Contingent Labour

In our new paper, The Evolution of Procurement and What it Means for Managing Contingent Labour, written in conjunction with Spend Matters, we look at this issue and also touch on other aspects around where procurement might be heading, including the fashionable idea of “procurement as a service”.

Using contingent labour as an example it is possible to illustrate how procurement has evolved and how a category can create value in various ways.

In some organisations, obtaining the right contingent labour, such as highly skilled technicians, creative folk or IT experts, might be a direct source of innovation and, as such, competitive advantage. In other cases, cost reduction and operational efficiency through a super-slick engagement processes for contingent workers might be the key factor.

The key point, however,  is that every procurement professional needs to understand the contribution for their categories in their organisation.

Procurement Must Take A Multi-Pronged Approach To Contingent Labour

(An Excerpt from The Evolution of Procurement and What it Means for Managing Contingent Labour

Any analysis will immediately confirm that procurement must follow different approaches depending on both the category of spend being addressed, and the nature of the business and the drivers of success.

Are the ingredients for a food product important to its success, or is it enough that they are safe to eat? If we spent more on a better quality purchase, would we sell more or be able to charge a higher price?

Considering services spend categories, how important, for instance, is marketing to the success of the firm? If innovation and new products are key drivers, then supporting that by identifying and working successfully with the very best external marketing services providers will be more important than haggling over their margins.

Contingent labour spend may simply be a case of minimising cost at an acceptable level of risk, or it may be much more strategic, with access to hard-to-find talent, and speed of engagement critical to the business.

That was reflected in our roundtable last year when we heard several excellent examples of how the use of contingent labour was truly linked to organisational strategies. “We are looking at scenario planning and resourcing models to help predict blue collar contingent labour requirements.” And the days of the contingent workforce being purely low-level blue-collar or administrative staff are long gone.

“Some of our contingent workforce are key to how we win business from our own customers; they are a strategically important and also scarce resource”.

You can download the full white paper for free here.

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Creating our Vision: Why Procurement Needs an Avenger

Procurement needs a vision to help it overcome the challenges facing it. And this is why Procurement needs to be an Avenger rather than an ageing Godfather to survive.


Since being asked to attend the Big Ideas Summit 2016, I’ve been thinking about my own big ideas. I’ve drawn on my own experience, reviewed the ideas submitted in 2015 and for the 2016 summit, and read a range of materials, including the book ‘Thinking the Unthinkable’ which I would highly recommend to everybody.

Having reflected on all this information, I’ve got a couple of ideas of my own that I look forward to discussing with you all in person next Thursday. Before then, I have one that I want to offer for discussion amongst the Procurious community.

My big idea is simple. Procurement is simply not thinking big enough! As a function, we appear constrained and timid in our outlook, believing ideas that have been circulating over the last decade to be the strategic answers that will propel us forward into the next decade.  Procurement must demonstrate greater ambition towards its future role than it does today. 

We need a Procurement Vision!


Just as The Vision emerged in The Avengers to defeat Ultron, Procurement needs its own vision to help guide it through the challenges it faces.

Procurement’s vision needs to be ambitious and practical, demonstrating to the senior leaders of an organisation a clear sense of purpose and direction that shows how Procurement will benefit the organisation.

If this vision exists, I believe that initiatives such as SRM, Innovation, Collaboration and Big Data, all areas that have been discussed in countless articles in recent years, will realise their intended benefits, as their aims and objectives will have been clearly explained and understood by all participants to support the most successful possible implementation.

If no vision exists, how can we succeed? It may seem simple, but clearly articulating this vision can prove difficult for organisations. I am shocked when I talk to organisations today to hear that they are unable to tell me their organisational objectives or why they implemented a particular solution. Colour simply drains from the faces of individuals when asking them to try to quantify some form of business benefit achieved from an investment in a particular solution or project.

When I speak at Universities and business schools around the World, the role of Procurement is confused. Students are unclear on what it actually represents, whilst academics provide a wide range of explanations of what Procurement is, usually including it as a minor topic within Supply Chain discussions.

Unless Procurement Leaders, be they Public, Private or in connected areas such as media, show a clear sense of direction and unity on what Procurement is, the function could easily disappear.

Remember the scene from ‘The Godfather Part 3’ where Michael utters what are probably the most memorable lines from that film:

Pull me back in

Michael and the Corleone family have allowed themselves to become constrained by the expectations that others have for them.  Any intent to move forward is being hampered by the legacies and expectations from their past.

Procurement faces a similar challenge. If it lacks a vision on its future direction, it runs the risk of always being portrayed as a back office compliance function, simply ensuring adherence to purchase orders. Please don’t misunderstand me. These are important activities that need to be done properly. My point is that when no vision exists, attempts to implement new strategic initiatives will be thwarted, because organisations may not allow us to move beyond the self-imposed boundaries that Procurement has established for itself.

A limited historic scope for Procurement will not inspire the next generation of potential talents to come and work within our function. When talking about Procurement at Universities and Business Schools, current students already assume a number of our historic activities to have been automated and are certainly not seeking to join organisations if their immediate future is spent ensuring contractual compliance or managing tail-spend.

The next generation is interested in how Procurement shapes Sustainable Sourcing strategies, how Procurement supports top-line growth initiatives and how Procurement provides a platform to a wider career in an organisation.

Creating the Vision

How can we create this vision? A simple idea would be to imagine that Procurement did not yet exist. How would you create it today? What would you want to include in its remit? Where do you believe you should focus your biggest minds, and what could be automated?

Clarifying how Procurement will operate both in the short and longer term within your organisation will start to create a vision behind which your team can unite and move together. This will require Leadership to seek new opportunities for Procurement to drive and manage opportunities. It may require Procurement Leadership to conduct some ‘skunk-work’ initiatives, dedicating resources to ideas that they believe will benefit the organisation in the medium to long term.

I believe that establishing a vision is equally applicable to both Public and Private Sectors. I remember witnessing some of the earliest work on sustainable sourcing, ethical purchasing and talent diversity emerging in the public sector and student unions.

Procurement has the ability to devise a very bright future in terms of areas of responsibility and contribution to organisational growth. Let us ensure that we build the future we want to participate in, rather than face a future whose boundaries and expectations have already been determined for us.

Mark will be discussing procurement vision and clarifying the role of procurement during one of our panel discussions at the Big Ideas Summit on April 21st.

There’s still time for you to get involved with Big Ideas, by visiting www.bigideassummit.com, joining our Procurious group, and Tweeting your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.