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True Procurement Transformations, Part I


PurchTips - Edition # 268

By Charles Dominick, SPSM, SPSM2

 

What Is A True Procurement Transformation?

One of the hottest buzzwords in the profession is "procurement transformation." But if you talk to a few leaders doing "procurement transformations," you'll note that the phrase means different things to different people.

In this edition of PurchTips, I will share three of the seven areas that I feel should see major changes after a true procurement transformation. In the next edition, I will share the remaining four.

  1. Staff - Chances are if your existing staff had the right skills to meet the organization's current and future needs, you would not be leading a procurement transformation. That's not saying that you need to oust your incumbent staff members and replace each one. But you will need a more highly skilled staff which can be accomplished through training existing staff in current procurement best practices; adding new, more highly skilled team members; or both.
  2. Supply Base - There is a point of diminishing returns when going back to the same supply base year after year for new innovations, cost reductions, and process improvements. Continually bringing a subset of new suppliers into your supply base will open up doors to value not achievable by working with the same suppliers for decades on end.
  3. Stakeholder Relationships - A goal of many procurement departments is to get more respect from their stakeholders. But a true procurement transformation is not a "one way street." The procurement team needs to understand its stakeholders, their goals, and what their work means to the success of the organization in order for the procurement department to make the changes necessary to earn the respect of stakeholders and contribute to the overall success of the organization.

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