Purchasing Transformation

Are you gonna try to make this work,
or spend your days down in the dirt.
You see things can change,
yes and walls can come tumbling down!
Walls Come Tumbling Down, The Style Council, 1985

Although Style Council singer Paul Weller was aiming his anger at something (and someone) completely different and trying to inspire the youth of Britain to change the ways of the ailing empire the words are just as viable for the state of procurement today.

In a recent report – “Beyond Purchasing. Next Steps for the Procurement Profession” – KPMG asked a broad range of senior executives from a cross section of industries about the state of purchasing and what direction the profession is heading. The one thing that struck me when digging into the rather massive (64 pages) report was the dissention between the answers provided by those working within purchasing and the non-purchasing executives.

Answering the question of the biggest barriers to greater strategic impact for procurement, 54 percent of the purchasing executives answered; “Other functions lack interest in, or understanding of, how procurement can be used strategically”; the result from non-purchasing executives was 38 percent. On the other hand; 34 percent of the non-business executives answered; “Procurement staff lack understanding of the wider business”. The result from the purchasing executives was 20 percent.

Though metrics like this need the bigger picture to actually tell a definite truth, the trend that these two figures point at is vital; purchasing think highly of itself and points the blame at the rest of the organization for not taking purchasing seriously enough, at the same time, non-purchasers have lower expectations of purchasing since it believes that purchasing does not have the business sense necessary for partaking in the bigger decisions.

To change this misconception, purchasers need to start speaking a language that appeals, and is understood, by those traditionally on the c-level (Michael Lamoureux elaborates on this subject here). While many purchasing executives are getting more and more recognition for their work, reports such as this one shows that there is still a long way to go.

The choice is yours – are you going to make it work?

This entry was posted on September 23, 2008 at 3:19 pm and is filed under Business, Organization, Supply Chain Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.