For most of its history, managers at the U.K.-based industrial gas supplier the BOC Group asked the purchasing organizations in each of its 50 countries to do the best possible sourcing work it could do within its own geography with its individual resources. There was no sharing of best practices between those 50 different organizations globally five years ago, no centralizing spend regionally or globally and no overall strategic sourcing goals set. It was time for a change.

That fact was not lost on the company's global finance director at the time (and current CEO), Tony Isaac. As a finance director, Isaac had worked more with procurement staffers than most sales-based executives. Isaac decided that BOC's 50 worldwide purchasing heads would come together for a meeting to discuss the prospect of sharing practices and moving to a centralized supplier management model. That meeting resulted in the creation of a global supply management council consisting of a representative from each global sourcing region and one council head. The council also concluded early on that to become a globally centralized strategic sourcing group, it had to clearly define its goals and created eight strategic objectives.

"The strategic objectives were just re-cast a year ago and are at the heart of everything we do," says Australian native Craig Lardner, who served as the CPO for BOC's South Pacific region when the supply management council was created. Lardner was later tapped to be the next group manager, supply management for the BOC Group and head up the supply management council. "If there's a piece of work going on in our group anywhere around the world that does not support one of those eight strategic objectives, I want it stopped. And if there is an idea not in place that supports those strategic objectives, I'd like it started."

Strategic objective number one: Continually demonstrate value to the stakeholders and deliver against business plan commitments.

"That may not seem like rocket science, but it was not what we used to do," says Lardner. "This tells us we will work on things in our procurement function that will help our business units deliver what they are trying to achieve. Our procurement group used to focus too much on the things they were good at buying, but weren't necessarily imperative to the broader business." Now controls and processes dictate that purchases will support the business units.

Strategic objective number two: Contribute to and draw from peer groups within BOC.

The idea of sharing sourcing information and best practices between business regions was something that BOC needed to focus more on. The global review found many procurement staffers working independently in one country to achieve the same thing their peers were trying to accomplish in another country and they weren't connected. Today, there are 20 peer groups addressing all sectors of BOC with the supply management council serving as the procurement peer group. The group meets regularly in different locations to discuss problems, share ideas and push winning strategies across the organization more quickly.

Strategic objective number three: Find and develop opportunities to jointly reduce total cost and drive growth initiatives with suppliers.

The cost reduction facet of this objective will come as no surprise to those in procurement, but the growth part might. BOC worldwide has implemented some extreme growth goals and members of BOC's procurement team are working to contribute more directly to that growth by participating in the research and development of new and existing products to increase profits. BOC has also made 14 acquisitions in the past 12 months, and the integration of the new procurement departments and strategies is viewed as a key component of getting newly acquired businesses to contribute to bottom line growth.

Strategic objective number four: Provide credible career paths to let BOC be seen as a great place to work and seek to employ people with a wide exposure to the business.

"Historically the purchasing department was not really the place where the corporation would find its talent of the future," says Lardner. "Most organizations now say they aspire to something greater for the purchasing organization." Lardner says attracting strong personnel to purchasing is becoming more difficult because the talent pool is shrinking as more organizations realize the value of talented sourcing professionals. The members of BOC's supply council are a good example of the growth potential for strong sourcing professionals. Of the 50 members originally assigned to the council five years ago, only one remains. Of the 49 that left, Lardner says one was asked to leave, while the remainder moved on to other positions within the company or left the company to bigger and better things.

"We need a set of business managers in procurement today, not just a set of good negotiators. The business managers must have amongst their skills the ability to negotiate and resolve conflicts. But it is a different portfolio of skills that the supply manager today needs compared to that of 1997."

Strategic objective number five: Ensure supply management is integrated into BOC's strategy.

This is clearly a close cousin to the first objective, but it is "50,000 feet higher" in Lardner's words. As he puts it, the supply management group "will aspire to detail its strategy to perfectly align and support the overall organizational strategy" outlined by senior executives.

Strategic objective number six: Support BOC's sales and marketing team to win and retain customers.

Closely tied to overall objectives, number six is aimed specifically at procurement's role in winning customers. To that end, BOC supply managers actually accompany salespeople on calls to detail the company's overall cost model to ensure customers of the priorities within the organization.

"A salesman can talk until he's blue in the face about cost controls, but I don't think the buyer is going to believe him," Lardner says. "But if one of my team sits down and shows this customer what we're doing to manage our cost, there is going to be a bit more credibility and belief in the end. We are kindred spirits - it is purchasing talking to purchasing, so the chemistry works."

Strategic objective number seven: Identify and leverage best practices across the supply management group.

Best practices improvement is a preoccupation within BOC. That includes employing specialists specifically to drive these efforts - people who do no buying or selling, but only ensure that the process or tool being used is the best it can be.

Strategic objective number eight: Explore, exploit and deliver new systems and technology efficiently and cost-effectively.

The supply management organization is exploring e-procurement technology and others like it to find the best value for the organization overall, but does not plan on buying or piloting every "whiz bang" technology that comes along, according to Lardner. It has been using reverse auctions for two years, but is not banking on that technology working miracles. Reverse auctions are seen as "another tool in the toolkit" according to Lardner.

"Having the radar up and picking up technology shifts and having clever people in place to translate that technology is key," he says.

The strategic objectives have been a success for the purchasing organization at BOC, but there were some major hurdles to overcome in defining and implementing these strategic objectives. Because BOC's purchasing was so decentralized around the globe, it was harder to get information and strategies to the CEO to get attention and spend more money on purchasing. But having a former finance director for a CEO puts a greater emphasis on the cost side of the business than on the sell side as is most common in business today.

"We're blessed with the fact that the finance director became our CEO," Lardner says. "I think it's more the exception than the rule that the CPO reports direct to the CEO, but I do in our organization. That organizational relationship has enabled me to do some things in BOC that I would have found harder to do if I were a layer or two down in the organization."

Isaac has made the supply management council such a high priority that he has attended every meeting either in person or by teleconference since its inception. This type of backing has allowed the supply management group to continue to pursue these projects and goals.

Lardner says too many purchasing departments today see the lack of executive support as an excuse for procurement professionals to shy away from major overhauls, according to Lardner, and that excuse is rapidly losing its teeth.

"Often when I mix with my counterparts from other organizations, we tend to cry on each other's shoulders about the lack of recognition for the procurement function in the organization," Lardner says. "We self-sympathize and try to make ourselves feel better. I take the view that it is actually our own fault. If your CEO or finance director or the organization at large has not seen how much value there is in a leading-edge procurement function, then it's entirely our fault. It's not an easy thing to do or fix, but the reward for doing it is worth the effort. We should not be sitting back in our chairs and lamenting that procurement does not have the focus it deserves and saying 'I have all the answers if only they'd let me do it.' Get out of the chair and start selling harder. And if you can't do that, then stop lamenting."