Beyond purchasing

A strategic role? | Section I 11
Views on the function
Procurement at our organization focuses too much on simple cost reduction and not enough on value
CPOs, Procurement Executives
& Supply Chain Directors
Non-Procurement Executives
9% 26%
18%
33% 13%
11% 42% 23% 17% 4% 2%
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Procurement at our organization is too focused on compliance and rules-based processes at the expense of delivering
innovation in the value chain or business operations
CPOs, Procurement Executives
& Supply Chain Directors
Non-Procurement Executives
4% 26%
26% 27% 16% 1%
11% 29% 25% 23% 6% 7%
0 10 20 30 40 50 60 70 80 90 100
% of respondents
Agree strongly Agree Neutral
Disagree
Disagree strongly
Don’t know/ Not applicable
part of the leadership is part of turning it
into a valued profession,” Pedlingham
says. Within the British civil service, five
years ago there were very few
commercially experienced directors
inside operational departments.
“One of big recent changes was to begin
to drive level of seniority of procurement
folks,” adds Pedlingham. “We are still a
long way from where we want to be, but
there is a growing recognition of the
impact procurement can have on
departmental budget. The conversation is
beginning to be understood.”
Just as important as a place at the top
table is showing others where
procurement might help. A particularly
timely specific example is in dealing with
risks arising out of a credit crunch.
According to our survey, the most
important purchasing­related dangers
facing companies by far are supplier
continuity risk (listed among the top three
by 69 percent of respondents) and
commercial risk (64 percent).
0
Procurement has the close relationships %
with suppliers and a strong sense of
which suppliers are most likely to suffer
credit difficulties. Jeff Gallant, Vice
President, Procurement at Bell Canada,
sees it as procurement’s job “to make
sure a supplier is financially healthy,”
and notes that Bell does regular financial
reviews of them. Connelly insists that
companies must make sure that they
pay not the absolute lowest prices, but
ones which allow well­run suppliers to
make a profit. Similarly, Paul Snow, Vice
President, Procurement of High Liner
Foods, a Canadian­based seafood
business, sees altering payment terms
to reliable suppliers in temporary
difficulties as a risk worth considering.
These are risks and decisions with serious
possible strategic consequences for the
whole company where procurement's
input is key. As Dominique Gardy, Chief
Procurement Officer, Shell International
explains, addressing such risks is
“not a supply chain management affair
on its own, but it is one of supply chain
management together with the
business.”
For other functions to understand
more broadly where procurement can
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