The supply chain of today is dynamic, rapidly evolving, and requires great strategic, operational and tactical acumen. Procurement professionals must have a proficient understanding of many aspects of the modern business landscape. These include socio-demographic, technological, political, industry, economic, competitive, and ecological parameters. We must understand these parameters from the perspective of what is trending, how our organizations and procurements departments are being impacted by those trends and what are the supply chain strategies in place to capitalize on opportunities that are identified. Procurement professionals must be capable of deploying risk mitigation strategies in response to identified risk.
Effective procurement strategies are focused on creating balanced responses to the environmental factors that are identified.
The following are the critical strategic points of leverage or Pillars of Strategic Procurement Execution:
1.) Employee and Skills Focus: An effective procurement strategic can only be executed by assuring that all procurement personnel has the required skills to execute their job functions. Extensive training and certification can yield great results, confidence, and ROI. Supply chain leaders must also assure that their teams are heavily engaged and inspired. Many progressive supply chain cultures employ robust rewards and recognition programs to enhance employee engagement and productivity.
2.) Process, Technology, and Quality Focus: Efficient supply chain and procurement processes are the vehicles to realize departmental and organizational objectives. This sequence of steps must be capable of sourcing high-quality raw material inputs, delivered at the right price point in the correct quantities at the proper time, and low Total Cost of Ownership. These processes must be enabled by modern technology. Blockchain and Artificial Intelligence are powerful enablers to procurement processes.
3.) Customer Requirements Focus: Procurement technology and process governance must be underpinned by a clear understanding of customer requirements. In fact, all strategic objectives must be underpinned by a clear understanding of end-user needs, specifications, and requirements. All actions, plans, and activities in the supply chain and supporting processes must leverage these requirements as critical points of reference.
4.) Financial Focus: The financial viability of an organization is the function of highly engaged and skilled employees leveraging efficient processes and technology. The output of this union will yield high customer satisfaction. This high degree of customer satisfaction will result in the financial viability of organizations.
These four pillars of Strategic Procurement Execution must be underpinned by robust metrics and data analytics platforms. Social responsibility and eco-friendly strategies should also be leveraged in response to the desires of the modern customer.
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