Efficiency drives restructures across the entire profession

16 November 2009

16 November 2009 | Jake Kanter

Procurement departments have undergone substantial change during the economic downturn, according to the latest SM100 poll.

More than 40 per cent of buyers who responded to the survey said their purchasing function had been restructured to increase efficiency.

In the past year SM has reported on notable transformations at Royal Mail, Stagecoach and technology firm Smiths Group.

Pressure to cut costs and challenge spending decisions prompted the changes, respondents said. Others said they had made efforts to improve supplier relationships and stakeholder management. Many departments have made redundancies, foisting greater responsibility on a fewer number of purchasers, in turn necessitating an overhaul.

Some organisations, however, have been recruiting to assist with transformation programmes. Tony Hall, head of procurement at Welland Partnership, a shared service centre providing purchasing guidance to five UK local authorities, said: "Our sponsoring councils have backed the recruitment of staff at a more senior level to embed good procurement practice and reduce risk."

Ian Selden, procurement manager at Procurement departments have undergone examination board AQA, said its purchasing overhaul is designed to improve relationships with internal customers. "We've decided to focus on the business units by supporting them, gaining early engagement to optimise current and future business and vendor activities," he said.

Purchasing consultants have also noticed the trend of transformations. Tom Woodham, director of Crimson & Co, has worked with five clients in a range of industries to increase procurement's mandate and cut costs.

Another consultant, Alex Strange, added: "Many organisations have made redundancies and failing to restructure results in delays to orders and excessive work being placed on remaining staff. "

Although 59 per cent of purchasers have not seen changes to their departments, many said they have increased cost-cutting efforts and made sacrifices. One buyer for a major auto firm said: "We have made cuts like many companies, including no bonuses and reduced pay or some short unpaid leave. We have asked people to be more flexible and support other areas, as well as changing activities in purchasing to focus on cost reduction and long-term strategy planning for a rationalised supply base."

SMnov2009

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