Procurement ‘too narrow a term’ in globalised world

Will Green is news editor of Supply Management
18 November 2013

Procurement is ‘too narrow a term’ to describe the role of buyers in a globalised world.

Peter Kraljic, director emeritus at McKinsey and Company, told purchasers that supply chain management would be the “core function” of the future.

Speaking during a discussion on the future of procurement at the ProcureCon conference in Amsterdam, he said: “We are in very volatile times. It’s a globalised world, changing very quickly.

“In this world procurement is too narrow a term. You have to optimise the whole supply chain. Supply management is the core function of the future and everything else should support that.”

Kraljic said buyers needed to “create a win win situation for your company and suppliers”.

Alex Saric, head of marketing EMEA and APJ at Ariba, said with the rise of automation, outsourcing and offshoring of procurement functions, the main focus in the future would be analytics and relationship-building.

“There’s going to be a new skill-set,” he said.

Mark Hannay, head of procurement EMEA at Credit Suisse, said pressure to cut costs were a distraction.

“As a business we live quarter by quarter. The drive-to-drive cost out of the cost base is a concern. As a sourcing function we need to stay true to a longer-term view and ride that out,” he said.

“I see too many people sitting behind their desks dealing with the latest email. I think we should spend more time out in the business, out in the market. We need them to develop relationships with people, not just spreadsheets.”

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