For procurement to be a constructive force strategically and execute the business strategy, these professionals need to be able to engage and influence at an executive level and cross functionally. Procurement specialists need to drive innovation and implement efficiency across multiple supply chains from point of source by demonstrating sharp business acumen, says People Shop MD, Chantal Kading.
Steve Jobs, a CEO to whom others aspire to emulate prioritised the Procurement and Supply Chain Management function in enablement of the Apple vision. He appointed Tim Cook, his CPO (Head of Procurement, Supply Chain and Manufacturing) as the new CEO of Apple Inc. The question is why. Simply, he saw the value of Procurement and Supply Chain to Apple’s success. Jobs trusted Cook. They shared the same vision for Apple but more importantly, they could interact at a strategic level and Cook was accountable, reliable and dependable to Jobs.
CEO agenda
The starting point to raise the strategic significance of procurement is connecting effectively at the executive level.
The value proposition of the procurement professional has transformed in the last five years from being an operational purchasing to strategic sourcing function. From being a driver of bottom line cost savings to the next wave of supplier relationship management, which is based on transparent collaboration that drives business efficiency, value creation across multiple supply chains and economic upliftment through enterprise development.
To date, the transformation was ignited through pressure on margins and the resulting drive by the CFO to save costs. At this point many new strategic sourcing divisions were established. The next wave in procurement will be fueled by the constrained global economic market, which places a question mark around commercial competitiveness and business sustainability. In short, these goals are on the CEO’s agenda.
Changing competencies
In future, negotiators who focused on cost will be extinct, replaced by business leaders who innovate, influence and implement – and who drive total cost of ownership as Commodity Managers.
Procurement leaders will be able to deal with ambiguity as they work cross functionally to enable the rest of the Supply and Operations to create business value, efficiency and competitive edge. The role of the traditional Commodity Manager has begun to transform, giving rise to inclusion of Supplier Relationship Management and Procurement Excellence covering risk, governance, compliance, business process and internal audit.
Supplier Relationship Management enables thinking that goes beyond product and price to helicopter vision. The next step up is the effect of procurement on revenue generation. In South Africa, the BEE charter will impact not only how companies’ source but how they compete and sell in the marketplace and clients will prioritise enterprise development. When recruiting in this area we look for people able to build mutually beneficial relationships with suppliers and.
Qualifications value
Qualifications mean nothing if you have them but everything if you don’t.
The good news for professionals seeking to climb the Procurement and Supply Chain ladder to the C-Suite is that the qualifications paths are vast. A few of these qualifications will be advantageous. Multiple disciplinary educational routes are valuable within the field with the most common being Commerce, Engineering and Legal, but the perspective that they bring to a diversified team is where the real value lies.
As the discipline transforms, post-graduate degrees are essential at the Management level. The one qualification consistently requested is an MBA with the institution, academic results and research projects having become the differentiator for a candidate. The latest qualification of choice is the MCIPS, a qualification but also an affiliation and standard measuring stick against which Procurement professionals as being measured.
Professional procurement
Over the past decade procurement professionals have held highest potential in negotiation of remuneration packages.
The strategic value of these individuals has increased overhead cost but value created to business lowers the total cost of ownership. Salary ranges depend on many factors such as size of company, industry, supply chain maturity and economic pressures.
The bottom line is that procurement and Supply Chain can fuel and execute the business strategy. Procurement has a voice that needs to be heard by the C-suite. To be heard and followed takes influence born in business acumen,” concludes Kading.
In closing the short text version of Apple’s famous “Think Different” campaign (from source: CPO rising)
Here’s to the crazy ones. The rebels. The troublemakers. The ones who see things differently. While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.
In conclusion, Steve Jobs saw procurement differently. Shouldn’t your CEO aspire to do the same?
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