The Future of Procurement - From Function to Capability
As market conditions became increasingly volatile and unpredictable, the ability to move fast and rapidly implement change and innovation has taken on a new urgency for all companies. The latest market challenges (Pandemic, inflation, supply chain disruptions, etc.) put procurement in the spotlight at a time where procurement mainly caught unprepared for complex and time-critically demands. Even more it turned out that the current transactional service-oriented approach and mindset in procurement is not enough any more.
The Agile Movement offers promising new ways of working so that companies like Tesla have had e.g. much less struggles with the CHIP Shortage. They followed a different sourcing strategy and where Agile enough to use other semi-conductors by rewriting the operating system in no time. Other Agile Companies like e.g. Buurtzorg (Success story on page 17) with more than 15,000 employees have one of the highest customer & employee satisfaction without a HR department. Or Haier a Chinese multinational (Success story on page 18) with more than 80,000 employees organized in an Ecosystem of over 4,000 micro-businesses achieved a $2b market value while revenues & profits have grown annually by 20% over the last 10 years.
After years of focusing on improvement of procurement via e.g. digitalization & automization but not questioning the current ways of working will this white paper provide insights about the future of of procurement - beyond just a function. Get inspired from 8 success stories in various maturity stages how you could develop your ways-of-working and drive your own journey.
The top 3 take-aways from this white paper are:
- From Supply Chain to Ecosystem - Current examples like Haier show that an Ecosystem of Agile Micro-Businesses is much more successful & resilient. Procurement has the opportunity to take a leading role in that Movement.
- It’s a Journey - Start today! - To become a leader in Business Ecosystems Procurement needs to first transform itself and it’s way of working. This white paper might give inspiration for an incremental change.
- Procurement becomes a Capability - Successful examples like Roche show that Procurement becomes a strategic Capability in the Business to be as reactive as possible. Procurement shifts it’s role to a proactive enabler.
Success stories show that with Agile ways of working all current important trends in Procurement like e.g. Digitalization / Automatization, Sustainability / Circular Economy, Supply Chain disruption / Risk Management, Inclusion / Diversity, etc. could be much easier incorporated than today. Even better than that it could be achieved better outcomes, faster on a much sustainable work pace which increases obviously also employee and customer satisfaction.