With a wider view than purchasing cost management, procurement is the organisation’s gateway to external resources, which are typically valuable and rare.
Procurement needs to manage the incoming material, service, quality, technology, innovation, and sustainability, as well as risk and cost. The procurement function also contributes to the organisational resources mainly through its knowledge of the supply market and skills. Therefore, procurement is being recognised more and more for its direct and indirect role in sustaining the organisation’s performance and competitiveness.
External mega trends such as economic trends (such as new markets and a new economic balance), ecological trends (for example pollution, greenhouse gas emissions and scarcity of natural resources), demographic trends (like population greying and urbanisation), and new technologies (such as explosion of information), are changing the role, priorities, and structures of the procurement function. These changes are driving procurement professionals to develop their capabilities in order to be more competitive in an increasingly complex and volatile global environment.
The role of procurement has been transforming since the early 2000's, from a mainly finance-based, clerical activity into a strategic process that contributes significantly to organisational performance. The transition is still occurring through moving from transactional buying to supply management, and then towards strategic sourcing and value-adding procurement.
Our work in this area is critical to professionalising the supply chain profession and a key area explored within the Leading Procurement Strategy Programme and Supply Chain Management Programme to enable effective skills for next generation professionals in these areas.
Blog produced by: Dr Soroosh Saghiri, Senior Lecturer and Course Director of Leading Procurement Strategy Programme at Cranfield School of Management.
Read more:
