Buyers more confident of senior management support

Will Green is news editor of Supply Management
12 October 2014

The proportion of buyers who believe senior managers see procurement as a strategic function has almost doubled in the past year, according to a poll.

The Xchanging survey, distributed through the networking organisation Sourcing Interests Group, found 68 per cent of respondents thought the C-suite viewed sourcing and procurement as strategic in 2014, compared to 38 per cent in 2013.

Xchanging said this represented a “major shift in perceptions about the procurement function and the value it can drive within an organisation”.

Dave Bowen, managing director of procurement for Xchanging Americas, said: “To see the number of executive teams viewing procurement as strategic nearly double year-on-year is extremely promising.

“One of the reasons for shifting opinion is the increasing potential to source from new low-cost markets, which is creating a compelling opportunity to impact the bottom line.”

The survey, in which 72 people in North America took part, found the majority of respondents (36 per cent) said between 25 per cent and 50 per cent of indirect spend was managed and influenced by procurement.

The top priorities for respondents were cost reduction in indirect goods and services (18 per cent), followed by a need to consolidate suppliers and improve relations (17 per cent) and finding a means to track savings to the bottom line (15 per cent).

The poll found the biggest challenges faced by buyers were purchasing policy compliance (18 per cent), managing indirect spend (16 per cent), controlling tail spend and spot buys (16 per cent) and spend visibility (16 per cent).

Bowen said: “The fact that many respondents reported the management of indirect spend as a notable challenge for their procurement departments suggests organisations need to reconsider their approach.”

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