Purchasers' spend influence up four-fold in two years

2 August 2009

03 August 2009 | Jake Kanter

Procurement's influence over spend has increased more than four-fold in the last two years, according to the latest SM100 poll.

The survey of 100 purchasers found 31 per cent have the authority to decide whether or not their organisation should buy something. This was a huge increase on the seven per cent in 2007, when SM posed the same question to the SM100 panel.

In addition, many of the 69 per cent of buyers that don't have full control of purchases said their influence over spend has increased "significantly". Two years ago, 42 per cent of the respondents said they "sometimes" had the final say on purchases, while 51 per cent had no authority.

Respondents this year explained that increased influence was the result of procurement raising its internal profile, as well as the difficult economic conditions.

Martin Wakelin, purchasing manager at industrial group Trelleborg said: "We now have more influence in situations which previously we were not involved in and I'd put a lot of this down to hard work on integrating ourselves into business processes, but also the downturn changing peoples perspectives on cost reduction."

Mick Holding, head of supply chain at defence and law enforcement equipment supplier Datong, said early involvement in product design gives his department greater influence over sourcing decisions, supplier selection and inventory policies.

"Our power is greater as the need to achieve good value for money is now a key driver. Reducing costs is the new mantra," added Paul Murphy, procurement manager at the National Policing Improvement Agency.

Purchasing can secure the final say over all acquisitions through continuous collaboration with stakeholders, said Ebute Leo Eteh, buyer for Nestle Nigeria. But he added: "Procurement decides what is bought only in terms of choosing from the options available and what suppliers are best."

The buyers with less authority over their organisations spend still noted an upturn in procurement's profile and power.

"We have a lot more influence than we have ever had before. We are getting involved in new categories and the profile of the team is a lot higher, said Liam Gormley, buyer at Newcastle City Council.

"If the current trends continue, we should soon reach the point where we can have the final say on what is bought, but even now we are much more active and influential advisors on spend."

SMaug2009

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