While procurement may not be as sexy as marketing or as active as sales, a corporation’s supply chain management is just as important to a business strategy as any other department. Less than a decade ago, when the Recession was underway it was the procurement leaders (CPOs and others) that were determining how their company would move forward into the 2010s. Now with a strong economy, procurement specialists are looking to reexamine the goals of supplier purchasing and how a new tech based economy will lead to the evolution of corporate procurement.
Enter ISM Nashville 2018. ISM is the Institute for Supply Management’s annual conference and connects procurement specialists from across the nation reviewing best practices and future goals from companies throughout industries. This year’s conference saw a focus on Global procurement strategies and brought forth the idea of strategic purchasing. According to Supply Chain Management Review, procurement is “becoming less tactical and more strategic, less focused on pure cost reduction, and more focused on customer alignment.”
This means that the supplier / customer relationship is more involved. This evolution has changed “from engineering to cost to engineering to price, meaning collaborating with his customers to develop products that can be sold at a specific price.” In addition, “routine tasks of procurement will be automated, procurement organizations will be smaller and the folks working in them will be focused on analysis, strategy and enabling the business.”
For a company to grow it must either decrease its expenses or increase its sales and although many procurement employees would like support in their cause of seeking cost strategies, for now it appears there is still a premium focus on sales. This means that the technology to automated processes is still a bit of a ways off. Still things are changing and it appears purchasing experts are not as focused as shrinking their supply chain as they were during the Recession. With a strong economy comes a new way at looking at buying and it is currently underway.