Procurement Moves from Tactical to Strategic

Dec. 16, 2011
Procurement certainly has come a long way. The simple definition of "procure" that everyone knows is "to obtain, buy or acquire." A more complicated definition would be something such as "obtaining goods and services from requisition to receipt and ...

Procurement certainly has come a long way.

The simple definition of "procure" that everyone knows is "to obtain, buy or acquire." A more complicated definition would be something such as "obtaining goods and services from requisition to receipt and approval of invoice payment."

Today, procurement (as "BUY") plays a crucial role in all aspects of the supply chain mega processes of PLAN – BUY – MAKE – MOVE – STORE – SELL/DELIVER.

The new Tompkins Supply Chain Consortium report "Leading Procurement Practices: Trends of the New Procurement Organization," notes that procurement is shifting from tactical to more strategic activities.

In the past, procurement was very much a transaction-oriented process, whereas today it is a strategic initiative process. The shift from tactical to strategic can be attributed to procurement activities such as market knowledge, supply base management, risk management, and supplier selection, However, the core functions of strategic sourcing, purchasing, procurement IT and supplier relationship management are also still highly important.

Procurement is beginning to add value to the company through strategic alliances and advanced competitive analysis. And as the function gains ground, supply chains are demanding more skilled procurement professionals.

Some of the best and brightest are currently seeking careers in the procurement field, and they need to understand how to be effective in today’s complex supply chain environment.

Organizations are looking for broader experience in procurement due to increased globalization. This includes advanced relationship building and multilingual skills. Even professional societies are providing certification to enhance the skills of the professional workforce.

The Consortium report also indicated that the number of colleges with supply chain and procurement degrees is on the rise. So, I think it is safe to say that involvement in procurement is higher and will continue to advance further into supply chains.

What is your company’s current take on procurement? Is the evolving nature of procurement affecting how you hire staff?

Jim
Tompkins Associates

Popular Sponsored Recommendations

Interconnected but Exposed: Hidden Third-Party Cyber Risks in Manufacturing

March 7, 2024
Dive into the cyber risks facing US manufacturing from third-party ties. Learn mitigation, secure access, and compliance strategies with live solution demos. Equip your business...

6 Ways Manufacturers Can Use GenAI Today

Feb. 1, 2024
Hear six compelling use cases where generative AI is making a significant impact in augmenting frontline workers and transforming operations. Learn how GenAI Assistants and smart...

Future-Proofing Your Business with Smart Manufacturing

Jan. 2, 2024
An IndustryWeek-Plant Services-Smart Industry-Automation World-hosted webinar sponsored by Amazon Web Services

Capitalize on Energy Flexibility with These Four Strategies

Feb. 4, 2024
Energy flexibility – the ability to temporarily reduce or shift energy use – can unlock revenue, lower energy costs, and more. Learn how to capitalize on energy flexibility with...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!