Daily Archives: January 20, 2016

Outside-In Issues are Shaping Modern Procurement — Is Your Organization Ready?

Last year, the doctor and the maverick identified twenty issues that were occupying a CPO’s mind in our post on what is top on a CPO’s mind, from overarching issues affecting the organization — such as economic instability, globalization, innovation and corporate reputation — to value creating methods that can increase the overall value of Procurement — like category management, supply base redesign, lean and six sigma and total cost modeling.

The reality is that if Procurement’s value is ultimately derived from the extraction of value from supply markets, then, by definition, the CPO Agenda is driven heavily from an outside-in perspective. This value starts with assurance of supply, and continues with innovation, market penetration, reputation, and regulatory compliance. In other words, the days of focussing on supply assurance, cost reduction, and demand management from a pure supply standpoint alone are long over for any company that wants to survive the 21st century and the many damnations it brings to Procurement (see the 100 Damnations index).

One has to remember that stagnant GDP growth, rising inflation, steady or increasing unemployment, rising inequality between the rich and poor and an increasing need for resources in greatly limited supply are creating a perfect economic storm that will sink any company not ready to compete in the global marketplace that has taken hold in most large economies. Value chains are becoming bifurcated and turned on their heads. Consumers want local and they want global on demand. Products need to come from everywhere and go to everywhere, be compliant with local and foreign regulations, be produced in a socially responsible fashion and be sold through the appropriate digital channels. And this all has to be done by Monday morning at 9 am.

Because, today, a CPO has to deal with half-a-dozen overarching issues that are shaping the course of supply management before she can get to the nine (or so) issues clouding her agenda and the dozens of value drivers at each layer of the hierarchy of supply. Over the next few months, over on the Spend Matters CPO site, the doctor and the maverick will be chronicling these issues, agenda items, and value drivers in three 10+ part series that have been in careful development for a while now, to, finally, give a CPO a complete overview of the mad, mad world they have to survive in.

The first post, on CSR, Environmental Stewardship, and Sustainability is up and ready for your reading pleasure. Check it out.