Sourcing Strategy

From the backroom to the boardroom: the rise of the Chief SCM Officer

DouglasBoateng_100.jpgGlobal directional-level corporate and policy decision-making corridors are going through unprecedented changes. These dramatic shifts have been largely influenced by the increasing importance that boardroom executives attach to supply chain management.

Today, the skills and knowledge of supply chain management professionals are increasingly being utilised, with forward-thinking executives and policy makers now officially accepting the Chief Supply Chain Management Officer as a member of the C-suite.

Drawing on a sample of international organisations, including Fortune 1000, FSTE 250 and JSE 100 companies, as well as public-sector organisations with a combined revenue or spend of well over a trillion USD, the study by Professor Douglas Boateng [1] examined directors' understanding of the strategic importance of supply chain management and, in particular, the increasing boardroom role of the Chief Supply Chain Management Officer.

Join us at Smart Procurement World Indaba in September for a panel discussion on 'Driving a Procurement Mandate and the Professionalisation of the Function - the need to rebuild, professionalise and license the procurement professional in South Africa' >>

Tactical vs. strategic sourcing: which road should you take?

TwoRoads_100.jpgProcurement departments are becoming increasingly more important to the organisations they serve, so it is important to ensure that your organisation is using the right procurement methods.

There are two primary sourcing methods that your organisation can use - tactical sourcing or strategic sourcing. Jeffrey Charles discusses the pros and cons of each.

The catch-22 of outsourcing relationships

KateVitasek_100.jpgCustomers and suppliers alike maintain that they value innovation. But, far too many outsourcing contracts are full of perverse incentives that inherently disincentivise suppliers from investing in innovation. The result? A catch-22 where outsourcing relationships become a race to the bottom, a situation where organisations think they are spurring on innovation but, in reality, they are fostering the status quo.

Kate Vitasek, Professor in Supply Chain Management at the University of Tennessee, unpacks how transaction-based sourcing models are preventing innovation and shares how to move away from them in supply relationships.

How much can procurement change on its own?

KellyBarner_100.jpgThree ways in which collaboration can create procurement transformation

Procurement has been trying to make changes to its processes, priorities and brand identity for years. Our suppliers want us to be more open to contact and implore us to conceptualise out-of-the-box ideas. Our internal stakeholders want us to move faster and let their input play a larger role in supplier selection than merely request for proposal performance. Distributed buyers want speed, convenience and autonomy. Finance wants more savings that they can track all the way to the bottom line, and marketing and human resources mostly just want us to go away.

"But what about procurement? What do we want?", asks Kelly Barner, Managing Director, Buyers Meeting Point, an online resource for procurement and purchasing professionals.

Bringing demand planning to board level

JohannesGiloth_100.jpgThe telecommunications industry is evolving at tremendous pace. Nokia predicts that in 2025 the number of connected devices in the world will have risen from less than 10-billion to around 50-billion. These will include machines such as cars and household appliances that will communicate with each other.

"Today, most data sets are generated by human beings; in the future much more data will be generated by intelligent machines that will talk to each other. The volume of data is exploding and so too is the demand for real-time communication. This will require different hardware and software solutions and will have a massive impact on the supply chain," says Johannes Giloth, senior vice president of operations for Nokia Networks.

Giloth sat down with Supply Chain Movement's Helen Armstrong to describe the challenges of operating in this extremely dynamic and competitive marketplace.

What can board games teach us about procurement?

GordonDonovan_100.jpgThere are several parallels between games and business strategy. Gordon Donovan (FCIPS), Group Director: Procurement and Supply, Epworth Healthcare, wonders what we could learn about procurement from games and, as such, takes a look around the world wide web to find out more.

Join us at Smart Procurement World Western Cape on 9 & 10 April to understand "procurement board games". Ian Russell (founder of Disrupting Consultancy, ex-CEO of BCX and a former CPO of Telkom, SABMiller and Absa) will discuss what procurement leaders should grasp now to become board-ready

10 procurement value creation ideas

DavidMillington_100.jpgHow can procurement create value beyond cost savings?

David Millington, Certified Supply Chain Professional, Next Level Purchasing Association, offers ten procurement value creation ideas in this month's SmartProcurement.

Join us at Smart Procurement World Western Cape on 9 & 10 April for a discussion on reaching true partnerships with strategic suppliers. Sanet Shepperson (Executive Head: Property and Procurement, Cell C) will facilitate a session on innovation and value creation in key supplier partnerships

Is not spending, a saving?

MiraRistovich_100.jpgBy Mira Ristovich, Founder of MRC, a consulting firm that assists with various end-to-end projects, and Senior Associate at Bespoke Group Africa, an organisation dedicated to the strategic procurement outsourcing of projects.

Two decades after I began my work in procurement (I was involved in business performance management and measurement prior to joining the procurement family), I can still remember how surprised I was to find that many business owners believed that not using an allocated budget meant that they were saving money.

Unfortunately, this kind of thinking still exists.

Stakeholders are your customers: ignore them at your peril

ElainePorteous_100.jpgStakeholders can and will influence the outcome of a project, especially if they are likely to be directly affected by it. If you thus fail to meet the expectations of key influencers, projects will be delayed, will only be partially workable or, at worst, doomed. Elaine Porteous unpacks the process of winning stakeholder support in this month's SmartProcurement.

Free State welcomes Smart Procurement World

SPW_FS_100.jpgSmart Procurement World is bringing its regional conference to the Free State.

Partnering with the Free State Department of Economic, Small Business Development, Tourism and Environmental Affairs (DESTEA) has enabled Smart Procurement World to take its procurement and supply chain indaba into its fourth South African province.

Since beginning in Gauteng in 2009, Smart Procurement World has extended into the Western Cape, KwaZulu-Natal and, on 19 March 2019, into the Free State.

The five rights of procurement

EmanAbouzeid_2_100.jpgThe primary task of procurement is to provide the 'right' inputs for an organisation's processes.

The 'right' inputs are traditionally described as follows:
- Inputs of the 'right quality'
- Delivered in the 'right quantity'
- To the 'right place'
- At the 'right time'
- For the 'right price'

These are often called the 'five rights' of procurement and supply.

Eman Abouzeid (CSCP, CIPS), a procurement and supply chain professional with global experience, unpacks why it is important to achieve the five rights.

The management of procurement value

SergiiDovgalenko_100.jpgIt is now apparent that procurement can deliver an extensive value proposition in addition to traditional savings and compliance. Procurement has the potential to be a revenue centre, empower suppliers' product innovation, manage risks, contribute to customer satisfaction and so much more.

Traditional procurement strategy that pragmatically concentrates on return on investment (ROI) and the enablers of ROI does not sufficiently elaborate on the variety of value elements that can be unlocked.

A step towards introducing this new dimension of value elements is to develop a classification of different values.

A group of authors from Bain & Company, in their article The Elements of Value, has undertaken such an approach and built the Value Pyramid, which can be customised for procurement.

Sergii Dovgalenko (FCIPS), Head of Procurement, Etihad Airways, takes us through the process at a high level:

Procurement perspectives: exploring a more efficient procurement process

StephenBauld_100.jpgIf a municipality intends to explore the possibilities around effective and efficient procurement by adopting a more strategic approach, then it must place emphasis on taking proactive measures to improve the purchasing function.

"It is not sufficient to rely on only those measures that would prevent things from going wrong; it would be time well spent to concentrate, initially, on conceptualising an overall proactive approach to the procurement function", says Stephen Bauld, a government procurement expert.

Your procurement resolution: don't settle for best-in-class

AlexSaric_100.jpgWhat better time to set and start tackling key objectives for 2019? Your New Year's resolution should be to be better than best-in-class...

"Achieving best-in-class performance won't result in procurement becoming truly strategic and may actually hinder progress in the long term. So, don't settle for best-in-class", says Alex Saric, from source-to-pay suite provider Ivalua.

Perfecting the art of procurement? Learn from the masters

KevinDoran_100.jpgTo move your procurement organisation to the next level, it pays to learn from the masters...

New research conducted by Accenture Strategy shows that a small group of procurement masters - defined as the top 10% of procurement organisations in terms of performance - are delivering a 15:1 return on investment (ROI) to their organisations. This tangibly impacts the bottom line in a way that makes CEOs take note.

"Other companies can learn a lot from these masters", says Accenture Strategy's Kevin Doran, Managing Director: Global Procurement Practice Lead.

How can procurement help drive organisation strategies in the face of turbulence and vulnerability?

Mediacy_.jpgCountless studies have established that the C-suite and boards of directors want their supply chains to become fully-fledged business functions and with the ability to influence organisational objectives or in the case of private sector, profitability. We have been here before, but what has been tangible proof of "from backroom to boardroom, procurement goes strategic"? How do you measure the true value of procurement's influence on organisation strategy? The answer is a function of the level of influence supply chain teams have on overall organisation strategy, says Medacy Mudekwa, Head of Content for Smart Procurement World.

Smart Procurement Review will soon hit the shelves. To get insights into procurement developments over the last 12 months, email us for your copy.


 

 

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