Carbon control not a priority
Procurement emerges as winner from downturn
Looking at the risks
Councils concerned about suppliers' financial robustness
Big rise in insolvencies and administrations at the end of 2008
17 December 2010 | Angeline Albert
role in European and US firms has moved beyond cost reduction to have more
focus on supplier relationships.
was the conclusion of a survey of 162
procurement directors and managers in July 2010 by
market research firm TNS-Sofres,
published this week.
The buyers from firms based in the US and Europe, said
the recent financial crisis has broadened the scope of the procurement function
with the financial health and sustainability of suppliers becoming one of their
Some 60 per cent of buyers interviewed believe their
relationship with suppliers is changing.
The sudden drop in economic activity, combined with the
credit crunch, resulted in a high number of bankruptcies in 2008 and 2009.
Buyers said the objective now is to monitor and identify risk to prevent
disruptions in the supply chain resulting from such business failures.
Some 59 per cent of buyers said suppliers’ financial
health and sustainability is monitored by strengthening their partnerships with
Purchasers, who in the past were often considered just
negotiators, said they are now playing an increasingly prominent role in their
company, acting as experts capable of proposing solutions such as product
design improvements for their management, internal customers and suppliers.
The survey also shows buying
departments making widespread use of new technologies to support the growing
importance of their role. For example, procurement is increasingly acquiring IT
tools to optimise workflows and automate the procure-to-pay process to allow
buyers to focus more on strategic tasks.
Procurement leaders said they are employing spend
analytics, e-sourcing, supplier quality monitoring scorecards and contract
lifecycle management to optimise their strategic role.
However, the survey also reveals that building corporate
social responsibility into the procurement process took a back seat with regard
to purchasing priorities in 2009. Buyers said they perceive it as a necessity, but
that it remains difficult to put into practice. While 90 per cent of companies
have integrated sustainable development into their priorities, only seven per
cent believe they have achieved their objectives in this area.
The survey was conducted by telephone in June and
July 2010 and commissioned by IT services firm CSC.