Procurement has historically been a major concern for industrial companies and retailers but with global crises, changes in business models and globalization, even industries and business sectors that were not that concerned by procurement are getting more and more interested in understand how to leverage Procurement as a source of additional value creation. Procurement is clearly now a central piece of the business and a priority in CEO’s agendas.
Over the past two years, the Value Sourcing & Supply Chain team has interviewed more than 100 Chief Procurement Officers and senior executives across industries in Europe and North America. We have married the group’s collective insights with our expertise and compiled anecdotes highlighting business initiatives spearheaded by these procurement organizations.
In this Playbook, we explore the evolution of the procurement function’s missions, from its original cost reduction role to risk management and to contribution to growth as a strategic partner. We then turn to the key dimensions of the procurement organization’s operational model, covering strategy, processes, structure, human resources, and management system and tools.
The Maturity staircase of the procurement cost control
Faced with the difficult financial environment of recent years, the Procurement organization's cost reduction mandate is a top priority, and savings remain the main objective. More and more ambitious targets are being assigned to Procurement departments, which remain the driving force in maintaining business competitiveness.