Purchasers should be leading change

17 October 2001
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18 October 2001 | David Arminas

The time is right for procurement professionals to "move up a gear" and take a greater leadership role even though the world economy is in a dire state, Dr Richard Russill, director of consultancy Innovative Concepts, told the CIPS annual conference and supplier forum in London this month.

Boardrooms will demand more visible returns on investment in everything from e-commerce to basic logistics, he told delegates to "A call for change". Procurement must make its case at a time when the already rocky global economy had been severely affected by the recent terrorist attacks on the World Trade Centre in New York and the Pentagon.

"Procurement has evolved from serving the business into a value-for-money profession and then contributing to business profitability and overall success," he said. "But why is it that we keep having to relearn that higher-profile procurement makes sense? Could it be the curse of the cost-reduction complex?"

Russill said that many initiatives in the 1980s, such as the government's Central Procurement Unit, saw purchasing only as a cost-saving area.

"The problem was and is that such initiatives, whether public or private, perpetuate the image of procurement as being a function to cut costs. They reflect the view that spending money is an undesirable consequence of being in business."

Companies with successful supply chains see costs more positively. "Investing in supply costs gives them access to external resources that enable them to be in business in the first place," Russill added.

He also warned against believing this economic downturn was like its predecessors. There was a greater awareness by people in all countries that businesses must give something back to society at large.

He called for a larger role for all facets of social responsibility in corporate development.

SMoct2001

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