Procurement Value Creation Starts with Enhancing Awareness

By Jim Baehr

July 06, 2017 at 3:43 PM

The Pittsburgh Institute for Supply Management (ISM) affiliate recently hosted a webinar directed to Procurement Value Creation.  Two noteworthy points emerged from that session.  The first was a concise review of the procurement value creation process presented by Susanne Wrage, the Senior Director of Denali’s Procurement Services Center of Excellence.  The second stressed the importance of ISM Affiliates’ ability to connect with their membership in non-traditional ways (i.e., not just another dinner meeting).

Ms. Wrage called out the need to understand that our line of work has evolved beyond conventional buying and that it must continue to evolve to create value for all stakeholders, both internal and external.  While she acknowledged that cost savings still represent the “gold standard” by which Procurement organizations are measured we need to establish more than this one measure of performance. 

Susanne challenged the session participants to ask ourselves how we’re doing with our essential responsibilities like risk management and alignment with business goals? How well do we communicate with other internal groups on measures that important to those groups like Sales (growth and/or time to market)? Operations (assurance of supply)?   Or, Finance (working capital reduction)?  Even if the exact dollar value of this support can’t be captured shouldn’t we at least be tracking accomplishments in these areas?

To reposition Procurement as a value creator we need to become Sales and Marketing people in addition to being buying people.  This is a change that we seem to be reluctant to accept.  Yet, selling internally would likely enhance our ability to sell externally with suppliers. We need to develop stronger relationships with stakeholders by moving out from behind Purchase Orders and Requests for whatever.  Finally, we need to accept the responsibility to convince Senior Management of our ability deliver value. It’s naïve to only hope that others see Procurement as bringing value. We must also be sure to communicate our achievements.

As for the other noteworthy aspect of this webinar - it comes down to ISM Affiliates accepting that traditional dinner meetings can’t be the only means for connecting with members.  Some have already adopted webinars as another approach to engage members and are having success.  Affiliates need to evolve - finding and trying creative ways to engage and educate their members.  Otherwise, they will come up short as value creators.



Tags: ISM procurement risk management Institute for Supply Managemente
Category: Blog Post

Jim Baehr

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Jim Baehr is the Lead for the Sourcing Strategies Group LLC (SSG) supporting the supply management needs of clients in both the public and private sectors. Prior to forming SSG, he was an independent advisor for several years. 

His most recent corporate roles were as Vice President of Global Information Technology Procurement for Reed Elsevier, and Director of Technical and Services Procurement for Bayer Corporation. Baehr has extensive experience in senior management positions and an accomplished career in sales. 

Currently, Baehr is the President of the ISM – Pittsburgh Affiliate, a member of the Board of Governors of the Joint Chemical Group of Pittsburgh and a member of the Visionary Council of Coupa Software Incorporated based in San Mateo, Calif.

He is a blogger, a frequent presenter at meetings and conferences and a contributing author to the book Next Level Supply Management Excellence: Your Straight to the Bottom Line® Roadmap.

 

 

 


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