Buyer Role: Procurement

Procurement and sourcing are responsible for following a standardized approach to “buy from” other organizations, from identifying a need for a product and service to procuring the creation, receipt, invoicing, and payment processing with vendors. Procurement processes can be configured toward specific business needs by defining purchasing policies and workflows.

The 3 reasons below will explain how procurement enforces your organization.

REASON 1: Procurement is a Necessity

Every business or organization that provides goods or services needs to buy or procure various things – machinery, spare parts, and consumables – or even services. Procurement is a word used here for the entire process of obtaining these goods or services, which is an integral part of the business activity. Of course, not all companies agree on this broad procurement description, and some consider it a simple matter of raising a purchase order to buy something. But the consensus today is that procurement is a process incorporating the best purchasing practices and covers all the stages like sourcing suppliers, shortlisting them after necessary scrutiny in terms of the credibility of the potential supplier, quality aspects, pricing, terms of delivery, etc., and then wrapping up the transaction by proper documentation of payment and delivery schedules, thus completing the buying process.

REASON 2: Supply Chains are Becoming More Complex

Sourcing & procurement is becoming more critical as supply chains grow increasingly complex. Specifically, how leaders utilize suppliers is changing: +70% of sourcing & procurement professionals report using suppliers to tap into new-in-kind technology services and something outside their organization’s core business model. As a result, organizations are more reliant on suppliers than ever before. In such a world, it is the role of sourcing & procurement to unlock new value from the supply base and protect the organization from future disruption.

REASON 3: Procurement Has Value to Their Organization

Procurement leaders must move beyond short-term cost management to leverage supplier capabilities to their maximum advantage in a structured and segmented fashion. This involves aligning supply chain sourcing strategies, driving stakeholder engagement, and setting and communicating the right metrics internally and externally to drive the correct behavior.

Today, Procurement leaders are looking for suppliers that add real business value and are willing to pay a premium if the supplier has taken the time to understand what they are trying to accomplish. Hint: This is not about your products or services but solving their business problems. This is the most delicate area of the procurement leader’s responsibility because it determines the overall perception of the procurement role’s value to the business. This is a responsibility that keeps many procurement leaders awake at night.

Updated on June 27, 2023

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