The role of Procurement & Cost Management in today’s business arena is ever more important, in a context where complexity, speed and uncertainty have increased significantly.
Building Procurement with a Value Generation approach, rather than price reduction, is on top of the agenda of any CPO to address internal and external challenges related to globalization, competition, uncertainty, and more. To enable a Value-based Procurement, in our view, key patterns are the following:
A value generation approach is crucial now that organizations are shifting from a Supply Chain to a Value Chain view, where Procurement is an integrated practice working with all the functions R&D, Supply Chain, Manufacturing and Sales & Marketing included.
Moving from a supply chain view to a full Value Chain view, in which procurement is a fully integrated practice, that works with all functions including R&D, supply chain, manufacturing and sales and marketing – to leverage value in cross-functional initiatives like Make or Buy, E2E loss reduction, complexity management.
Procurement can play a key role in Design to Value, Design to Cost and Should Cost initiatives, that typically allow CPO’s to exploit fact-based negotiations and fair-price evaluations, eroding waste in the collaboration with suppliers and helping taking decisions on the E2E lifecycle costs.
In addition to traditional source-to-contract and order-to-pay applications, Procurement can now take advantage of strategic sourcing tools, spend analysis advanced analytics, sophisticated cost engineering tools, and much more.
As buyers are asked more and more to integrate with supply chain and ensure a 360° governance over suppliers. Proper attention to Contract Management enables companies to timely identify opportunities, reduce losses and manage risks proactively.
After Covid-19 the importance of flexibility and resilience was made even more clear. Procurement can help building insourcing and reshoring options, developing alternative supply chains, and governing the risk of supplies.
Visibility is a necessary enabler for effective decision making; applied to procurement Data and KPI helps capturing all dimensions for value generation such as cost reduction, innovation, level of service, sustainability, etc.
Mindset and behaviour are critical for Procurement organizations and the contribution of each single person of the team makes the difference. Aligning desired dynamics to the digital era is of paramount importance also in the Procurement organization
EFESO Consulting professionals are uniquely equipped to help you addressing such challenges. Our experts will help you to:
Procurement is fully integrated into our model for Value Chain Progression, so we can assure you of our quality support both in functional improvement and in End-2-End Value Chain optimization.
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