Australasian buyers enjoying 'new prominence'

22 October 2009

23 October 2009 | Allie Anderson

Purchasers in Australia and New Zealand have gained greater recognition as a result of the global recession, a survey by CIPS Australia (CIPSA) has found.

According to the Strategic Procurement Benchmarking Survey 2009, the purchasing function is enjoying "a new prominence" and is seen as key to reducing costs.

The report, done in conjunction with procurement consultancy Portland Group, was based on the 74 responses from buyers at the top 200 companies listed on the Australian stock exchange, various large Australian public sector bodies and in New Zealand.

While 82 per cent of purchasers thought the importance of procurement had increased in the past three years, 76 per cent felt they still had to prove the value of what they do to the rest of the organisation.

The survey also revealed there are few procurement professionals at director level, with most senior roles "typically reporting in at two or three levels below CEO".

Just over half have asked suppliers to cut prices by 5 per cent or more, while only 28 per cent had engaged in procurement outsourcing to drive savings.

Some 64 per cent of buyers sourced goods and services from low-cost countries, seeking cheaper products and reduced labour costs. The main areas of spend were materials and capital equipment, while the top low-cost location was China.

The study also found more firms were incorporating sustainability initiatives into procurement to meet corporate policy and satisfy customer demand. "Some tangible initiatives included buying green office products such as paper, increasing recycling and reducing the amount of paper used," it said.

SMoct2009

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