This week’s webinar notes are based on a May 13th webinar presented by IASTA and Efficio, their European consulting partner. The event was recorded, and the on demand version is available on Slideshare. You can also download the presentation itself, which included quite a bit of data, directly from IASTA’s website.
As procurement expands beyond cost reduction and spend management into value based areas such as creating operational efficiencies, managing supply-based risks, and promoting sustainability, we become agents of change. IASTA and Efficio partnered to run a study on this topic, and in this webinar they shared some of their early findings, including where the greatest change is being carried out, what is standing in procurement’s way, and what tools procurement needs to execute the potential for change that they see.
It can come as a surprise to no one that savings is still the top priority. This study found that efficiency is a very close second, especially for enterprise (> $5 B) survey participants. Of all the challenges, small companies ($50 – 250M) were the most focused on supplier risk, and struggled to find additional suppliers. The link between procurement and the development of corporate brands is also becoming closer.
Lack of executive and stakeholder support emerged as the greatest hindrance to procurement success, over technology, skills, tracking, and process management. The study found that small companies are improving performance and maturity at the same time. The top three skills required to meet expectations are stakeholder engagement, category expertise, and negotiation. In order to address these skills needs, CPOs can watch sales and marketing for cues on how to manage and connect with executive leadership. While the skills usually required for success in procurement can be learned, influencing skills are more intrinsic and may need to be prioritized in hiring.
The study found that supplier management is not being fully used as a lever to get savings. Most of the benefits from this particular initiative are still to come, partially because it is hard to define. What companies are aware of is that there is less excess capacity, and low cost country sourcing is less appealing based on current trade-offs. The drive to improve and invest in supplier management should be increased alignment between the supply chain and corporate goals for operational efficiency.