Role Of Procurement In Organizations

High performing procurement teams contribute by providing competitive advantage to organizations rather than being cookie cutter negotiators!

Procurement has a major role as innovation enabler. One of the key differentiators for successful companies going forward shall be their potential to innovate. Studies show that more than 60% of innovations globally, involving consumer offerings are achieved through external supply partners. These innovations create market advantage versus competition in terms of cost, performance and brand value. Progressive procurement teams collaborate with supply partners through various Supplier Relationship programs. Toyota is an organization which has historically been highly successful in driving innovation through supplier partnerships and stay ahead of the pack in technological and cost efficiency. Visionary leaders view procurement as a proactive innovation sourcing agent rather than a transactional arm wrestler for cost reduction.

One of the key objectives of Supplier Relationship Management is to address supply continuity risk. Organizations address this challenge by diversifying supply sources. EU recently launched a supply chain strategy- “raw materials alliance” to ensure smooth supply of rare earth elements for future. As per FT, "Supply chains for rare earths are particularly hard to diversify. It’s not like finding a new source of crude oil". In spite…