A simple definition of the word transformation is a dramatic change in form or appearance. Transforming your procurement operation is no small task, and could involve several years of refining and tweaking.
Components of procurement transformation
A world-class, top-performing procurement group typically has several organizational components including:
- Procurement Center of Excellence (CoE)
- Sourcing excellence
- Market intelligence
If you have a smaller procurement organization, multiple roles may be performed by the same individual. In larger and/or global procurement groups, the roles that each group performs can be summarized as follows:
Procurement CoE: Responsible for technology and/or procurement processes across the company; This role includes revisions to any procurement policy as well as overall compliance. Most companies going through procurement transformation will need the support of several executives based upon the changes desired across the entire company.
Market intelligence: Responsible for researching and building all categories for all areas being sourced; Category Management plans should be developed for every sourcing category and included for sourcing excellence employees to execute sourcing events
The transformation of procurement and sourcing groups generally pays for itself many times over. Naturally, you want your company to be as lean as possible and to resist hiring more employees than you have to.
While this information is not intended to be all inclusive, we encourage you to contact Bryan Eaves of Sourcing Business Solutions at 865-805-4356. We will be glad to speak with you.
Resources: What procurement transformation looks like
- Developing a Supply Chain Center of Excellence – Procurement Journal — Excerpt: The concept of centralized or center-led procurement operations is nothing new. For years, chief procurement officers (CPOs) and their equivalents have been espousing the idea of recentralizing supply chain activities in order to leverage spend, develop economies of scale, reduce risk, and coordinate resources. Most organizations have moved (or at least started to move) in this direction, and the payback has been substantial…
- Procurement Excellence: What It Is and How to Achieve It – SupplyChain247.com — Excerpt: Experts point to certain key traits of procurement excellence, including an overall strategic orientation, alignment with business objectives, a risk management role, and an ability to collaborate both internally and externally…
- Sweet 16 Challenge: Top Discipline for Procurement to Achieve Value Contribution Excellence – StrategicSourcing.com — Excerpt: We have noted the top 16 disciplines in alphabetical order that must be embedded in the business for Procurement to achieve value contribution excellence. We want your vote as to what you consider the top 4 disciplines and finally your top discipline for Procurement to achieve value contribution excellence…