What's your objective?
Mike Verespej, Editor-in-Chief -- Purchasing, 11/18/2004 2:00:00 AM
The temptation is simply to urge purchasing departments and professionals to just focus on holding down costs. But to do that would be short-sighted.
Why? Purchasing is more than just reducing costs. It's about creating value for your customers, your suppliers and your organization. And, in this era of uncertain costs, companies need to align purchasing with business strategy and empower them to move forward with long-term initiatives that help a company stay competitive.
So ask yourself: 'How do you view your purchasing function?' Do you see it as a caretaker that manages the costs of a few key commodities and spends? Do you see it as an internal function that keeps your operation running cheaply and efficiently? Or do you see it as a strategic weapon that can create leverage in the marketplace and integrate the supply chain from end-to-end?
That was a question that was subject of intense discussion at the Conference Board's Purchasing Conference, held earlier this month in New York City.
"Your leadership style in purchasing has to be matched up with what the corporation expectations are, and, unfortunately, procurement organizations too often are viewed as very important, but not strategic," says Thomas Slaight, a vice president and specialist in supply strategy at A.T. Kearney in New York." "Too few companies have made purchasing a competitive differentiator."
Part of the problem is a myopic short-term view that needs to be changed.
"You need to look at procurement as a way to drive your organization forward to help it win in the marketplace," says Rion Needs, senior vice president of global procurement, American Express. "You have to make procurement an enabler or it just becomes another bureaucratic process."
The other part is that too many companies implement technology without an understanding of what they're trying to control. "You have to understand what you are spending today before moving forward," says Jim Flynn, manager of strategic procurement, Limited Brands. "Without that, all the technology in the world won't help."
The choice is yours. Do you want to win just today—or long-term.
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