Procurement professionals should get close to their colleagues in sales to help drive growth and innovation, according to a panel at ProcureCon Europe.
Andrew Powers, director of procurement packaging and equipment and business partner at Ecolab, said procurement professionals in his firm had trained their sales counterparts in procurement negotiation techniques.
“It has been very well received and helps them with their conversations,” Powers said.
He added that he also encouraged procurement professionals to sit with the sales team to find out what customers are asking for. “I’ll then take that back to our supply base to see if anyone can help fill that niche,” he said.
Will Auchincloss, VP and global GM advisory and analytics at PRGX, advised procurement people to go on business and customer calls with their sales teams.
“Go into a sales pitch,” he said. “Find out what people are asking for. You’re only going to get good innovation by going upstream.”
Powers used the example of one of Ecolab’s procurement teams sitting in on a sales call where a customer was talking about their need for a specific desalination solution.
“The procurement business partner went to the client, listened and took that problem back to the supply base,” he said. The resulting product solution opened up a “huge market” for Ecolab.
“Go to the customer, understand their need and then articulate that back to the supply base,” Powers advised.
The panel agreed procurement should get involved earlier in the design process for new products in order to drive out waste.
Auchincloss said procurement professionals needed to “go upstream” to design processes that take costs out. “There’s going to be innovation at the front of the business that procurement has to get involved with,” he said. “Figure out where the innovation is. That’s where your company has to be to grow. Get in early and drive cost out.”
“You have to be at the table early in the process,” agreed Powers. “Once a product is designed, 80% of the costs are fixed.”
Martijn Visser, procurement director at chocolate brand Godiva, said his procurement team was working closely with sales and R&D on emerging products, especially in high growth markets like Asia. “We are trying to break down barriers between functions and regions,” he said.
He added that speed to market was a high potential area for procurement to add value. “Speed to market is increasingly important,” he said. “Procurement has a role to play by selecting the right suppliers and reducing the length of the sourcing process by using technology.”