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10 April 2013 | Anna Reynolds
Procurement directors are more involved in strategic decision-making and are more reliant on suppliers’ expertise due to the economic crisis, according to the CSC SRM Barometer.
The annual report, which surveyed 284 procurement directors in the US and Europe between June and July last year, found 62 per cent of CPOs felt the economic crisis had enhanced the image of the purchasing function within their business and boosted its profile among other departments. This was reflected by the increase in senior leaders who now consider procurement as part of their responsibility, which rose from 27 per cent in 2011 to 47 per cent in 2012. A further 80 per cent also said procurement now has a seat on the executive committee.
The survey revealed most procurement directors have viewed the economic crisis as an opportunity to renegotiate contracts with suppliers and manage risk more effectively. Over half (56 per cent) of respondents are increasing the number of requests for proposal to obtain more competitive offers. Stricter inspection of financial statements and more inspections of supplier relationships ranked in second and third place.
Some three-quarters of purchasing directors rely on innovation to improve performance, which means forging closer relationships with suppliers. And almost 70 per cent of buyers surveyed said the use of a collaborative procurement platform was a driver for reinforcing supplier relationships.
The study also looked at the challenges facing procurement over the coming year. Cloud computing has become a priority for 70 per cent of respondents as a means of flexibility and ongoing cost reduction. 67 per cent of purchasers said internal customer satisfaction was the primary measure of performance, followed by the return on investment made by the procurement function.