Procurement is no longer just a cost-savings function. Organizations expect their procurement group to be profit enablers by acquiring the right materials at the right time and best price, and by ensuring that those materials are delivered to the correct points of consumption. Procurement must be able to drive value to all lines of business.
Visibility is the most critical success factor for procurement groups. They need to be able to see into the organization’s operations, competition, human resources, sales, and spend to chart their direction to profitable growth. Procurement must provide spend data to leadership and be able to accurately interpret results in a timely manner.
Risk mitigation is one of the newest expectations of a Chief Procurement Officer. Knowing which products the organization has purchased from which global suppliers allows CPOs to better assess risks and respond to supply disruptions. It also allows them to identify opportunities to consolidate their supply base, examine price variance, and ensure compliance with negotiated rates.