Resiliency Themes – Part 4: Procurement Becomes a Core Business Function

April 1, 2020Posted inArticles, Chief Procurement Officers, Events, General, Lists, Strategic Sourcing, Strategy
Resiliency Themes – Part 4: Procurement Becomes a Core Business Function

Ardent Partners takes the severity of the COVID-19 pandemic with the utmost seriousness. Please click here to read our approach in these uncertain times.

From March 31 through May 7, Ardent Partners will host The CPO Rising 2K20 – The Resiliency Imperative, an exciting new online series that focuses on the key strategies that procurement, supply chain, finance, and HR leaders will need to get through this period of adversity.

This series is comprised of web-based presentations, panels, and interviews with leading business executives, industry analysts, and other experts, as well as Ardent’s latest research on resiliency, agility, and the State of Procurement. Live sessions will run from March 31 through May 7 when the Virtual Summit is held. Recordings of each session will be available on the event site. Be sure to check back frequently as exciting new sessions will be added to the schedule.

The Resiliency Imperative – Part 4: Procurement Becomes a Core Business Function

The 2008-2009 global financial crisis was a harbinger of darker clouds on the horizon. But it was also a preview of the utility and value that procurement teams can bring to bear in times of crisis. 2020 is already walloping businesses across the globe, as the world grapples with a devastating pandemic and an economic slowdown to “flatten the curve” of new infections of the highly contagious and deadly Coronavirus. Global procurement teams are now caught up in not only a business crisis, but a human and public health crisis, too. That having been said, this is procurement’s time to shine.

As businesses across the globe look to their sourcing, purchasing, and supply chain operations to adjust to the sudden market conditions, maximize new opportunities within the market, and drive cost savings within the enterprise, procurement becomes a core business function (if it hasn’t already in the past decade).

Operationally, procurement teams, particularly those in the medical technology, pharmaceutical, and public sector industries, are engaged in the most critical effort to source personal protective equipment (PPE), lifesaving medical devices like ventilators, or materials to manufacture them. At a moment like this, procurement is front-and-center in the fight to secure these materials, and we can vouch for the severity of the need, as literally thousands of lives are at stake.

Strategically, Chief Procurement Officers (CPOs) and their teams have to reexamine their supplier relationships and supply chains, because the events of the last three months have brought into focus the risks associated with low-cost country sourcing and sourcing in markets halfway around the world. Globalization has been transformative for businesses, especially their supply chains. But a global crisis like a pandemic, which has caused major manufacturers to go offline for a month or two, and reduce output by roughly 17%, carries an unsustainable level of risk. Procurement teams and businesses are definitely scratching and clawing to source what they need to get themselves through this crisis; but long-term, changes appear to be on the horizon.

Financially, CPOs and their teams will need to continue to perform the basic “blocking and tackling” associated with procurement. The “playbook,” to continue the football analogy, is large and expansive. It includes placing more spend under its management, managing indirect spend categories, like contingent labor, services procurement, and T&E, gaining more visibility into buying behaviors, conducting sourcing events to find the best value in the market, codifying supplier agreements into contracts and holding both parties accountable to them, working with suppliers to foster innovation, nurture performance, and manage associated risks, collaborating with IT to drive digital transformation projects, and bringing procurement into the 21st Century.

Final Thoughts

We have said for some time now that there’s no better or no more exciting time to work in procurement than today. I think we need to amend that to reflect conditions on the ground — literally. Procurement has become so vital to both the day-to-day and year-to-year operations of a business that lives are on the line. The ability for a procurement team to source PPE for vulnerable first responders and medical teams, to source ventilators for the severely ill, to mitigate supply chain risks or find more secure sources to keep production lines open, and to understand the totality of a business’s spend to drive more efficient and profitable spend management, are core to procurement’s function. But not just that. They place procurement at the heart of the short-term and long-term survival of many businesses (and to be blunt, people). To put a finer point on it, there’s no more critical time to work in procurement than now.

CONTINUING TOMORROW!

Instead of our typical related research section, we are inviting our readers to investigate our new virtual series, CPO Rising 2K20 – The Resiliency Imperative. Click on the session titles below to learn more and register for them! (Note that there will be more titles coming soon).

On-Demand Sessions:

** If you enjoyed today’s article, don’t miss these sessions.

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