Inside Procurement: Building trust and enhancing procurement’s reputation

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The global trade landscape changes almost daily. Just last week, for instance, the Trump administration announced new tariffs on a wide range of popular European food, drink and other products – so if  you’re in the US and you love grated Parmesan on your Spaghetti Bolognese, prepare to pay more. 

 

While trade tensions like these are nothing new for veteran procurement and supply chain officers, they have escalated in recent years. Such rapidly shifting trade policies have brought a new element of risk and uncertainty into the already volatile environment confronting global value chains. They are also creating fears of a global economic slowdown, increasing pressure on procurement professionals to control costs.

 

These disruptions in global supply chains are coming as companies ask their suppliers to adopt more sustainable business practices. You may have spent months or years finding environmentally friendly products, only to find that prices have gone up, or specific supply sources no longer meet evolving, more demanding criteria.

 

Do you feel your blood pressure rising? In this high-stress atmosphere, the timing couldn’t be better to show procurement’s value to the organisation and its leaders, but the function’s ability to realise impact is directly proportional to its influence with these key stakeholders.

 

So how do you do enhance procurement’s reputation within the organisation? 

 

We addressed this question in a novel way at our Inside Procurement Live event in Chicago, where we brought together procurement executives from leading companies, including Beam Suntory, Here Technologies and Reyes Holdings, to debate, interact and learn about this important topic. Fuelled by coffee and a delicious breakfast in the delightful Waldorf Astoria, an engaging discussion flowed, and guests from sectors as varied as healthcare and hospitality left with plenty of food for thought.

 

Here are my six key takeaways from our discussion:

 

  1. Evaluate your tools, processes and people to see how easy it is for internal stakeholders to work with you. It’s easy to become internally focused, optimising our own processes and procedures in an effort to drive maximum efficiency in what we do and how we do it. But we have to do so in the context of our stakeholders (internal and external). How easy it for them to work with us? How effectively are we serving their needs? Looking at our tools and processes with an eye for maximising how easily our “customers” engage with us – while driving for efficiency – is essential to enhancing procurement’s credibility.


  2. Ingrain a data-driven mindset. It can be frustrating when others don’t see us as we intend – when we’re being unfairly branded due to prior perceptions of what procurement stands for. The fact of the matter is that other business areas often see procurement as a roadblock, or a necessary evil, rather than a partner. The onus is on us to provide evidence to the contrary – the more often, the better. One of the first places to start is to ensure our entire approach and methodology is data-driven and market-focused. For example, when we speak with marketing about PR agencies, let’s make sure we fully understand what comprises “total cost” as opposed to simple fee economics – data (typically in the form of TCO models) is therefore essential. Building that foundation is a key step to becoming a better business partner.

 

  1. Connect with the business early in a new corporate initiative or project. This is the holy grail for many. Working together at the start will help you understand the engagement, its strategy and goals, and key performance metrics. Having a seat at the table at the outset lets you influence strategy and solve problems more effectively. Then you can begin applying the appropriate processes and better anticipate obstacles along the journey. In other words, your procurement professionals become internal consultants instead of just doers. This requires nothing less than thoughtful, deliberate, consistent relationship management with all key stakeholders across the business. Building these relationships cannot be an afterthought – something to be done as and when time permits – it has to be part of each and every day.

 

  1. Embed procurement professionals in other departments. Living in the same “neighbourhood”, so to speak, lets your team cultivate relationships and establish common ground. We automatically have a much more positive attitude toward people that are in our “in” group, so it’s no surprise that our stakeholders will be far more receptive to listening to us and taking in what we say if we physically sit together. In this way, the “procurement ethos” also becomes implanted into the DNA of every key department in the company.

 

  1. Expand your scope. Saving the company money is just table stakes to building credibility inside your company. You have to recast yourself and, yes, perhaps play dramatically against type, by becoming far more than simply a cost driver. Start thinking about the C-suite and overall corporate goals. Look to embed not only straight dollar benefits, but improvements in the form of greater efficiencies, deeper productivity, as well as tangible innovation. Maybe it’s via a diversity or sustainability initiative, or perhaps it’s through structured mergers and acquisitions support. Be on the front end of the goal and go above and beyond (i.e. wider and deeper than just cost savings) to help achieve it. 

 

  1. Communicate the value you deliver. It’s not all about savings. If your goals are aligned with the enterprise’s goals, then your contributions are much larger and deserve visibility throughout the company, not just with your CFO. Get the message out and demonstrate the impact that has been made – newsletters, townhalls, and employee recognitions were just a few of the ideas from the floor. And think broadly about what messages you send out: you may be more comfortable expressing your value in key metrics, but it’s also important to tell stories to back up those metrics. Stories of the people behind the numbers can make a big impression and help build procurement’s brand.

 

If you found this interesting, take a look at our blog which includes our bi-monthly Inside Procurement series, for the latest issues and ideas that influence procurement and supply chain executives. You can also read more about our Procurement and Supply Chain offerings.

Omer Abdullah

Omer Abdullah

Omer Abdullah is Co-Founder and Managing Director of The Smart Cube, a global provider of procurement intelligence and analytics, including category excellence, commodity volatility management, supply chain analytics and supplier engagement strategies across sectors including Life Sciences, CPG and Industrials. Omer leads the company's business across The Americas.

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