First, Procurement is focused primarily on contracting savings and risk reduction. Marketing often sets similar targets for Procurement: reduce the price or TCO, ensure security of supply, etc. This is remarkable because these targets only reflect a small part of Marketing’s targets towards the customer. I think Procurement focuses on the wrong targets. Procurement should be part of the team delivering the complete end product to the customer, not just the final price-tag. For this, it will need to thoroughly understand the needs of the external customer. This requires Procurement to intensively collaborate with Marketing / R&D to understand the full package. Only then will it be able to fully tap into the potential of the supply base, to ensure proper selection and involvement of (potential) suppliers and to balance traditional cost-related targets within the full package.

Making the shift to a truly contributing Procurement department requires Procurement to change its focus from internal to external customer, which impacts the target setting, the procurement activities, the timing of procurement involvement in projects, the required competencies etc.

Robbert den Braber
Twitter: InnoProc

I work with a USAID funded project in South Africa that, as part of our overall mission, promotes supplier diversity and preferential procurement in order to make corporate supply chains more inclusive toward qualified black owned suppliers.

How do you think the politics of procurement would influence branding in this environment?

http://blog.saibl.co.za/ come check out supplier diversity week on the SAIBL business Forum….we welcome your input and ideas