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7 March 2012 | Angeline Albert
Procurement must stop taking a ‘cavalier approach’ to risk and seize the missed opportunities for savings that exist in non-strategic supplier spend, e-procurement specialist Proactis has said.
Joe Taylor, director of solutions at the spend control company, told procurement professionals at eWorld Purchasing & Supply yesterday, that the function must focus on all spend, and all suppliers, not just high-value, strategic providers.
Speaking at London’s Queen Elizabeth II Conference Centre, Taylor said: “I can’t tell you the number of procurement professionals who tell us ‘we have 2,000 suppliers and we manage 80’. I would say this is a cavalier approach to risk. It’s a wasted opportunity. You end up fire fighting when things go wrong with suppliers at the tail end.”
Taylor, who described the benefits of source to contract (S2C) and purchase to pay (P2P) in his presentation, said it was important to establish a culture of purchase orders. He said: “Buyers say they do it. We found the level of spend covered by purchase orders was very low. One police force said they did but had only 19 per cent of spend covered by purchase orders.”
Although Taylor described purchasers as doing a good job at managing core spend areas, he told the audience that with the need for securing efficiencies ongoing, a focus on the low spend, non-strategic suppliers would help “squeeze the last drop” of unnecessary spend out.