Malcolm Harrison said the role of CPOs is to manage the risk agenda © Peter Spinney
Malcolm Harrison said the role of CPOs is to manage the risk agenda © Peter Spinney

Procurement is about strategic sourcing

Procurement is more about strategic sourcing than placing purchase orders and making sure that requisitions are smoothly processed, according to CIPS group CEO Malcolm Harrison.

Harrison, speaking at a CIPS roundtable event in London, said in the past procurement had been focused on delivering value and ensuring consistency and continuity of supply.

“The context has changed. When you think about what many senior leaders, businesses, and organisations are looking for from their procurement and supply function, it's not just about delivering value or ensuring continuity of supply. It is about managing the risk agenda,” he said. 

“As a chief procurement officer, are you absolutely sure that there isn't any modern day slavery anywhere in your supply chain? What steps are you taking to ensure that is the case? Are you sure that your supply chain is completely sustainable?

“As consumers are choosing what products are going to buy, in part based on the ethical reputation of your organisation, it really is a top table issue.”

Harrison added there seemed to be a belief from some people that procurement has not been an important strategic function for organisations in the past. 

“I think what we see changing is more companies are realising that isn't the case. It's not just about placing purchase orders and making sure that requisitions are smoothly processed through the organisation.

“It absolutely is about strategic sourcing. I think it always was about strategic sourcing for those companies that really understood the real value that procurement could add.” 

The event, called ‘Today’s Digital Landscape and the Impact on Managing Talent’, was organised jointly with consultancy Russell Reynolds Associates. 

Jorge Gouveia de Oliveira, managing director at Russell Reynolds Associates, said CPOs of the future will need to ensure they are offering strategic leadership as digitalisation becomes a reality. 

Traits that will be required by organisations such as “positive disruption” and the ability to lead digital transformation aren’t widely seen in the CPO community yet, he added. 

“You have to have an understanding of digital advancements because digital is affecting everyone, from chief marketing officers to CPOs.

“In the future, a lot of the supply chain work will be automated. What's left is the strategic work and the ability to interact internally and externally.”

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