Is the Procurement Executive in a Rut?

Is the Procurement Executive in a Rut? The status and influence of the Executive Manager responsible for procurement often has financial, operational and strategic implications for the business. Positioned correctly the senior procurement executive’s responsibilities will include procurement policy, management, strategic direction, control and development of the procurement and supplies management function, the infrastructure and the overall interface between buyers, clients and suppliers. In effect the role of the procurement executive should be an integral and highly visible part of the organisation’s business strategy and worthy of a seat at the boardroom table. So why are so few senior purchasing managers not reaching the heights to which many aspire? I believe the difficulty for the procurement executive lies in the eye of the beholder i.e. the stakeholder. Is the stakeholder (the budget holder) prepared to permit someone, often with fewer business management skills and less understanding of business strategy, access to their departmental budget? Evidence over the years suggests no – other than for basic consumables that can be lumped together in a supply contract. Despite the increased complexity of supply chain management there is also the historic ‘image’ of procurement as a cost cutting unit with hard-nosed negotiators squeezing ever drop of blood from the supplier. This does nothing for the image of the organisation they work for. The basics of the procurement department also remain unchanged; the objective is still to identify and establish reliable sources of supply of the goods and services required for the business to operate effectively. With modern technology and the internet this is not all that difficult. What has the executive manager responsible for procurement done to remove this image? Very little is seems, and while the image prevails the manager is left to contemplate how they can break through the glass ceiling and into that illusive seat on the Board. That is a tough call for many procurement managers. Another problem lies in outsourcing. Some organisations are developing alternative models for delivering their core business by outsourcing internal support services. They believe specialist suppliers are more cost effective in providing the same if not better service than in-house operations. Others are successfully transferring much of their procurement activities to line management with procurement specialists acting as internal consultants. Senior procurement professionals need to rise above the current perception of this important function and satisfy boardroom members and stakeholders that they have the general management skills, an understanding of corporate policies, business strategy and direction, and the drive to force change for the better throughout every department and subsidiary company. Furthermore, they have to support their staff with adequate ‘business training’ and ‘interpersonal’ skills that are indicative of good procurement practice. Hard-nosed negotiators do not meet the modern procurement skills criteria. This article is not meant to detract from the strategic importance of the role of the Procurement Executive. Only to say that is for them to become better equipped in business management practices. Then they may have the opportunity to claim a key to the door of the boardroom. Please join my LinkedIn Group at; https://www.linkedin.com/groups/8293736https://www.linkedin.com/groups/8293736