Call for buyers to realise potential

29 November 2007
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29 November 2007

Companies have failed to explore the full potential of procurement, research suggests.

A lack of talent, aspiration and corporate alignment is harming the development of the profession, according to a report by consulting firm McKinsey.

It said the shortfall in talent is the profession's biggest barrier to moving the function out of its "transactional" mind-set. It encouraged firms to hire people with a deep understanding of the products they buy, such as an engineer to source electrical components.

The report claimed if a firm invested $1.5 million (£728,000) in strategic buyers for every $1 billion (£487 million) of spend it would achieve between $15 million and $20 million in savings.

It said that in the best purchasing departments, cost-savings programmes are seen only as a stepping-stone to a larger role for the function: "Top performers view it not only as the commercial conscience of the organization but also as its competitive eyes and ears."



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