No ‘disconnect’ with business objectives, say majority of purchasers

Will Green is news editor of Supply Management
6 January 2014

Just under four-fifths of buyers claim procurement objectives are aligned to those of the wider business, bucking the results of a survey of CPOs that revealed a “disconnect” between the two.

The Deloitte CPO Survey found new product and market development had joined cost reduction as the biggest concern for CPOs, but 61 per cent felt they were “only somewhat effective at delivering value to stakeholders”.

Nearly half put this down to a “lack of aligned objectives”, and Deloitte said this revealed a disconnect between purchasing departments and the wider business.

However, when asked in the latest SM100 poll: “As the economy returns to growth, do you believe the objectives of procurement are aligned to those of the wider organisation?”, 79 per cent of purchasers responded “yes”.

Neil Dixon, head of procurement and supplier management at LeasePlan UK, said: “How can a procurement department, or any other department within a business, operate with objectives that are opposing or misaligned to those of the organisation in this day and age?

“Having ‘pyramidal’ objectives aligned to those of the wider organisation is key to having both a successful department and to a successful organisation, and if the head of any procurement function sets, or is set objectives that are not aligned they should look very closely at the reasons for this and change.”

Ellie Cope, deputy procurement manager at the University of Leeds, said: “It is the responsibility of an effective procurement team to review its objectives and to ensure these are aligned with those of the organisation to ensure that it can add value and support organisational activities.”

But John Milne, procurement consultant at Hampco, voted “no”. “Procurement needs to be more entrepreneurial and align themselves with the revenue generators and concentrate on maximising profitability, rather than focusing on cost cutting,” he said.

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