• Procurement is defining its own culture; processes have had to become sharper and faster to be able to deliver
in evertighter competitive environments.
• Sourcing no longer equates to instant cost gratification, but is now defined as a strategic component used to drive maximum competitive advantage.
• Strategic sourcing is itself a benchmark. It relates to getting the best products and services at the best value.
• The growth of consumer knowledge across globalised economies has meant that the notion of instant gratification by people is now a given. If companies are unable to rationalise their processes effectively, the degree to which they will maintain competitive advantage can be seriously compromised.
• Companies must deliver, and this reflected in effective Supply Chain Management (SCM). The aim, ultimately, is to reduce inventory and risk.
• With the increased focus on cost and compliance, the procurement function has been elevated to a strategic component of value creation and a rich source of competitive advantage.
• To achieve this, rather than creating a world class procurement capability in-house, many companies have simply outsourced it.
• Procurement outsourcing is often undertaken to leverage economies of scale and improve the execution and control of underperforming or non-core tasks and poorly managed spend categories.
• In doing so companies can realise reduced supply and operational costs, improved compliance and enhanced performance and cycle times.
• As the need arise to maintain quality, coherence and deliver tangible savings across the supply chain has increased, so the focus has turned to procurement departments to realise the benefits through supplier relationship management (SRM).
• Effective management of the supply base is critical. When companies are confident they are working with the most capable and economic suppliers, processes can be streamlined.
• Companies can reap the rewards by managing relationships in a more strategic fashion.
• As the need to gain competitive edge tightens, companies that once content to cultivate their local and national markets are now keen to globalise their operations and tap into new markets.
• Global sourcing, and specifically low-cost country sourcing, is a hot topic. Legitimised by early pioneers, offshore providers proved their value as alternate resources.
• It should be seen as a long-term strategy rather than a tactical solution for short-term goals.
• Global deployment of work has its critics, but it can be argued that it holds huge opportunities for procurement: companies can benefit from lower costs, faster times-to-market and access to a massive pool of skilled resources, resulting in substantial value to the bottom line.
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