The purchasing strategy provides fundamental orientation for the alignment of all measures in procurement. In order to have a targeted value-adding effect for the company, it should be derived from the strategy of the entire company and specify and operationalize the general objectives for the procurement department.

One would therefore initially expect that such a strategy should exist by default.  However, this is unfortunately not the case. It is even rarer to find strategy concepts that are regularly reviewed and revised according to current developments and company requirements.

Digitization, trade barriers, climate issues, a shortage of skilled workers, and more and more regulations are what procurement management has to cope with today. However, it is precisely against this backdrop and the resulting renewed dynamism in the procurement environment that this is the goal.

Orientation in the dynamic procurement environment

The procurement strategy documents which goals and strategies are pursued by procurement, which tasks procurement assumes for this purpose, how cooperation with the specialist departments takes place and which measures are to be implemented in procurement.

In short, it defines the value that procurement intends to contribute to the development of the company.

If we interpret the defined strategy as a „signpost“ or „lighthouse“, an orientation that is not up to date will quickly lead to being sidelined or, even worse, to shipwreck. The greatest risk is probably taken by those who do nothing at all (Deloitte Global CPO survey 2019).

But how can the strategy concept be modeled proactively and specifically?

Covering the relevant fields of action for procurement.

One thing in advance: the wheel does not have to be reinvented. Fundamental objectives in procurement remain as before. Thus, the realization of cost reductions and the preservation of supply security will continue to have top priority in the future.

But today, the focus is on numerous other fields of action and, not least, risk areas that are independent of commodity groups, and which must definitely be taken into account and assigned goals for the procurement department, such as

• Management of political and economic risks (corporate social responsibility, trade conflicts, climate change, etc.)
  • Which risks are threatening in detail
  • What measures can procurement take to minimize them?
  • How can risk minimization be measured?

• Digitization

Long-term goals should be defined in a structured road map or digitization strategy. How can digitization specifically contribute to

• Reduce internal costs?
• Reduce external costs?
• Reduce complexity internally and externally?
• Improve decision-making?

• Shortage of skilled workers

The above requirements will not simplify the already difficult labor market situation. What measures can procurement take in order to

• make purchasing processes simpler or more efficient?
• identify development areas in the procurement team?
• build up necessary content-related and technical competencies in a targeted manner?

Is your purchasing strategy up to date?

With our systematic tools, we are able to determine your current status and maturity level with regard to strategic alignment based on external and internal benchmarks. In addition, we identify your respective development areas and develop tangible, concrete and measurable action plans.

Keep the reins of action in your hands – we will be happy to assist you in this.

Until then: Stay healthy!

 

Tim Rohweder

Partner, ADCONIA GmbH