CSCMP's Supply Chain Quarterly
December 16, 2017
Supply Chain Executive Insight E-Newsletter
Each week the Supply Chain Executive Insight e-newsletter will include brief articles about developments that are often overlooked by other supply chain publications. We will present you with summaries of the latest research as well as new ideas on how to make your supply chain operations more effective. And we'll offer commentary that sheds light on what's happening in supply chains today.
Sign up now!

Most Read Articles

News from our sister publication
DC Velocity
Forward Thinking

What you can learn from procurement superstars

Comment
IBM's study identifies the strategies and actions that differentiate "procurement role models" from their peers.

What's the difference between a top-performing procurement organization and one that performs at average levels? To find out, IBM's Institute of Business Value and the Economist Intelligence Unit surveyed 1,023 chief procurement officers from companies with revenues of more than $1 billion. The resulting study, "The Journey to Value: Transforming procurement to drive the enterprise agenda," compared the respondents and identified approximately 100 companies that achieved the best revenue and profit performance relative to their industry peers. Researchers then compared the responses from these "role models" to those from their peers.

The comparison revealed three main ways that procurement "role models" differed from "underperformers." First, they focus on improving enterprise success rather than just on procurement performance. Second, they engage with stakeholders to understand and anticipate their needs. And third, they used innovative procurement-related technologies to simplify transactions.

While the role models are just as concerned with traditional procurement priorities such as reduced spending and corporate profitability, the study found that these companies were more likely to place revenue growth and increasing the company's competitive advantage among their top three priorities. Procurement role models are also twice as likely to make the adoption of innovations from suppliers and other sources as a top priority.

The study also found that procurement role models were more likely to have regular meetings with business line leaders and outside suppliers, and to value that input.

The biggest difference between the procurement role models and underperformers, however, occurred in the area of technology implementation. According to the study, 72 percent of role models said that their procurement operations are automated, and 22 percent said they are somewhat automated. In comparison, only 47 percent of underperformers reported having automated operations, and 26 percent said they are somewhat automated. Role models are also implementing much more sophisticated technologies, including supplier management software, advanced analytics, and risk management capabilities.

The full report is available here.

Join the Discussion

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.


Want more articles like this? Sign up for a free subscription to Supply Chain Executive Insight, a monthly e-newsletter that provides insights and commentary on supply chain trends and developments. Click here to subscribe.

We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter 2015: What you can learn from procurement superstars"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.

Want more articles like this? Subscribe to CSCMP's Supply Chain Quarterly.