As Chief Procurement Officers (CPOs) know all too well, how and what is communicated during the sourcing process sets the stage for the resulting supplier relationship. And while that relationship may never become a true marriage of equals, there are several things that sourcing and supply management professionals can do to get things started on the right foot. This article series highlights seven important strategies and tactics that procurement organizations can use to drive savings while also maintaining and improving key supplier relationships.
Part Two: Early Engagement
Industry research has shown that the timing of when procurement gets involved in the sourcing process has a direct impact on results. Sourcing projects save more money when procurement is engaged at the front end of the process rather than later. The difference between serving as an order-taker or as a strategic partner is not subtle so, the challenge for CPOs and their teams is to figure out how best to engage the budget-holders in proactive planning discussions and formalize their levels of interaction and support.
One recommended strategy is for CPOs to “embed” their staffs in the business by sending them into the field for a period of time to engage and work side-by-side with the large teams and key business stakeholders. When procurement professionals are able to sit in business staff meetings and planning sessions, become active participants in the budgeting process, and understand the objectives and priorities of the business and how its staff is rewarded, they develop a much better understanding of the business’ needs and how to support them. By increasing the level of professional and personal interaction via physical proximity, higher levels of trust and communication are established, bridging the way for procurement to be engaged on more sourcing projects from the beginning.
Conclusion
In business as in life, there are a host of pithy sayings about showing up, showing up early, how the early bird gets the worm, and so on. They persist because they are true, if tired, assessments of the value of early engagement in any process, not just sourcing. The earlier that one engages in a sourcing project within the enterprise, the sooner that procurement can bring its expertise to bear and the longer that all stakeholders will benefit from that expertise, including cost avoidance, greater identified and realized savings, and greater likelihood of long-term success. Now, get in there and make us proud.
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