SWOT Analysis for Procurement Strategies

Leveraging SWOT Analysis for Procurement Strategies

PurchTips Edition #449

SWOT Analysis for Procurement

A SWOT Analysis at the Organizational Level is the study of an organization’s internal strengths and weaknesses, and external opportunities and threats.

A SWOT Analysis at the Departmental | Procurement Function Level is the study of a Procurement Department’s internal strengths and weaknesses, and external opportunities and threats.

Process for Departmental | Procurement Function Level SWOT:

Leverage your Category / Commodity | Sustainability Team to conduct the following steps:

Step 1: Assemble to collaborate with your senior management team
Step 2: Determine and document your most significant departmental strengths
Step 3: Determine and document your most impactful departmental weaknesses
Step 4: Determine and document your most significant departmental opportunities
Step 5: Determine and document your most impactful departmental threats                                                                                                                                                   

Procurement Department SWOT Analysis Matrix

Strategic Systems

 

Procurement Function SWOT Analysis Domains:

  • Strengths: are Procurement Function core competencies or capabilities that are executed well. They can be a source of strategic alignment and competitive advantage
  • Weaknesses: are Procurement Function disadvantages that exist
  • Opportunities: are external factors that, if leveraged effectively, can be a source of Procurement Function enhancement and competitive advantage
  • Threats: are external factors that, if they become reality, can constrain the Procurement Function and be a source of brand damage and customer dissatisfaction, requiring intense risk mitigation strategies

Notes about the above Procurement Department SWOT:

The configuration of the issues on this SWOT provides many opportunities to design and execute many departmental level strategies.

For example:

  1. The skill level of the procurements team can be combined with the innovation capabilities of suppliers to drive breakthrough solutions to organizational challenges that impact sustainability
  1. Collaboration with suppliers can be effective in reducing the number of products made from a high % of non-biodegradable raw materials
  1. The improvement of technology can reduce processing errors as well as carbon footprint, Total Cost of Ownership, Total Cost to Serve, and fiscal sustainability
  1. Reduction of errors can reduce can stock-outs, expedited shipments and carbon footprint
  1. The presence of highly skilled procurement professionals, collaborative suppliers can be leveraged to enhance supply sustainability and customer satisfaction

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Copyright 2019. This article is the property of the Next Level Purchasing Association and may not be copied or republished in any form without the express written consent of the Next Level Purchasing Association. Click here to request republishing permission.

By David Millington, SPSM, SPSM2, SPSM3 - Director of Education (Next Level Purchasing Association)

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