Procurement today is expected in many companies and organizations to reduce cost, minimize risk, add innovation and make sure everything is done in a sustainable way.
In order to make the best possible use of your procurement resources, it is important that you work professionally with stakeholder management. So that there is a continuous focus on what is important for the company and where it is going, at the same time there must also be a focus on the supplier landscape.
What happens to the suppliers' half of the pitch? This applies to both your direct suppliers and their subcontractors.
Overall, you can define four different types of relationships between companies and suppliers, and it is important that you as a purchaser / procurement department can navigate agile between these types and master them all.
- If there is both a stable demand from your company and a stable supplier market, then it is obvious to implement e-procurement and thereby free up time and resources for other functions.
- If the demand from your company is very stable, but the supplier market is constantly changing, it is important to build a heavy knowledge base in the Procurement Department so that it is constantly synchronized with what is happening in the market and from the supplier side in terms of development, prices, trends mm. In this way, Procurement can act as an advisor to the company.
- If the demand from the company is constantly changing, but the supplier side is very stable, it is important that the buyers know the suppliers' capacity, capabilities etc. Thus, they can quickly and efficiently advise the company when purchasing. In this type of relationship between Procurement and Suppliers, it is important that tenders are given through fast tendering processes and not lengthy large tenders.
- Lastly, if both demand and supply are constantly changing and changing rapidly, it is important that the procurement department continuously allocates resources to research new needs and the market so that they can best advise the company going forward.
The agile approach is more important than ever to be able to excel and secure the future existence of a professional purchaser.
The post is written by Bettina Rønn Laugesen, September 2020. Bettina teaches at NSCCM on Strategic Procurement and Procurement on the course Strategic Procurement.
Bettina has written a number of other posts on Procurement. You can e.g. read about LEAN in Procurement and how you can make the value of Procurement visible.