Five tips for procurement success in 2015

Sigi Osagie is the author of Procurement Mojo: Strengthening the function and raising its profileThe recession and other business factors put procurement in the spotlight in 2014. The horse meat scandal that engulfed several supermarkets and slave wages in the supply chain of some clothes retailers are just a few examples.

The demand for better supply management is likely to intensify in 2015 and beyond. Procurement functions will need to up their game to meet expectations!

Here are some top tips for propelling your procurement success in the year ahead:

Think ‘people’ not ‘purchasing’. It is people that do the purchasing work, not computers, strategies or PowerPoint presentations, so people matter most! Focus on building your people capability in 2015, with emphasis on enhancing ‘soft’ skills – the critical competencies to become more organisationally savvy and sell the procurement agenda with flair. Talent will increasingly become the key differentiating factor between procurement pioneers and the laggards.

Forget fads and think ‘effectiveness’. It is easy to slavishly follow the latest best practices that promise overnight success, but they never stand the test of time. Those that seek procurement excellence without building underlying effectiveness will discover that you can’t hold water in a sieve. Focus on enhancing effectiveness - doing the right things - to boost your procurement mojo.

Focus on value not cost savings. Many procurement professionals are frustrated with the challenges of trying to sell procurement to the wider business and educating those who think purchasing is about “cost savings”. Think about how you can better educate those around you of the real value of procurement in the wider business context. Expand your thinking and approach. Cost is important but value is king, and value exceeds financial benefits.

• Embrace risk management and SPRM. Good purchasing is not just about doing the deal; managing the supply pipeline robustly is critical for your organisation’s success, your own personal ethics and the reputation of your procurement function. Adopt sound processes that simplify your operations, including supply risk management and Supplier Performance and Relationship Management (SPRM). These will become increasingly vital to safeguard your enterprise.

‘Walk the walk’, not just ‘talk the tale’. Expand your own effectiveness to boost your procurement brand. Think of stakeholders as ‘internal customers’, and learn to become a trusted business partner of relevance to them. Be a procurement ambassador in everything you say and do.

Sigi Osagie is the author of Procurement Mojo: Strengthening the function and raising its profile (Management Books 2000, £14.99)

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