We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • SUBMISSIONS
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
Home » Five strategies that make procurement more efficient and effective
Forward Thinking

Five strategies that make procurement more efficient and effective

October 12, 2016
Susan Lacefield
No Comments

The latest report from The Hackett Group Inc., "The World-Class Performance Advantage: Five Imperatives for Creating Greater Procurement Agility," identifies five strategies to make procurement more cost-effective and efficient. The initiatives proposed by the analyst group are based on an analysis of Hackett's procurement benchmarking database, which identifies companies that have world-class procurement operations and then compares those leaders to the rest of their peer group.

Some of the recommended strategies include:

1. Adopt a formal service-delivery model. Organizations such as global business services/shared service units and centers of excellence (COEs) allow companies to centralize both transactional work (in the case of a shared services unit) and more high-value work (in the case of COEs). This centralization results in reduced cost and increased efficiencies, says the report.

2. Apply new digital technologies. According to the Hackett report, procurement organizations need think about how they can use cloud-based infrastructure and applications as well as collaboration technology to improve their processes.

In an interview, Christopher Sawchuk, principal and global procurement advisory practice leader at Hackett and one of the co-authors of the report, suggested that procurement organizations should investigate how they can adapt some of the technology currently being used on "the customer side of the house" to their own processes. One example that he gave was incorporating the "guided buying experience" used by online retailers such as Amazon into procurement processes. Guided buying involves a website automatically suggesting other purchases based on someone's buying history.

"[Such] digitally enabled processes reduce errors and make information easier to access, freeing procurement staff for higher-value work," the report states.

3. Embrace advanced analytics. One emerging technology that may prove especially fruitful to procurement is advanced analytics that monitor external conditions and then suggest certain business decisions or actions (such as buying a particular commodity). According to the report, world-class procurement organizations, on average, are investing more in analytics than their peers. The report also recommends creating a dedicated analytics group within the procurement organization. According to the report, for large, multinational businesses this may involve creating an analytics center of excellence. Smaller companies, however, may need to dedicate only one staff person.

4. Design services and processes to be customer-centric. Oftentimes procurement processes are designed to make the procurement professional or department more efficient rather than to make the internal customer more effective. According to the Hackett Group, however, world-class procurement organizations design their processes so that they respond to an internal stakeholder's or customer's needs and wants. Many world-class procurement organizations even have formal service-level agreements for internal customers to make sure that the procurement organization is meeting their needs.

5. Dedicate more staff to performing strategic activities rather than transactional, compliance-focused ones. According to the Hackett Group's analysis of its procurement benchmarking database, world-class procurement organizations have a larger percentage of their staff allocated to sourcing, supply base strategy, and planning/strategic roles, while others are more focused on operations and compliance management.

Procurement
  • Related Articles

    Heavy rain may bring more pain for the U.S. supply chain

    When "moneyball" meets procurement

    More companies are using analytics to detect supply chain fraud, says Deloitte

Susan Lacefield is Executive Editor of CSCMP’s Supply Chain Quarterly.

Recent Articles by Susan Lacefield

Shippers should be using spot market more, says J.B. Hunt exec

Chef José Andrés finds universal supply chain lessons in emergency food relief

Conversation around supply chain technology has changed, says panel of executives

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Survey: parcel delivery drivers are frustrated by using their own smartphones for work

  • Survey: most Americans unaware that truckers face shortage of parking spaces

  • Best practices in logistics sustainability

  • Supply chain executives not yet seeing expected results from technology investments

  • Postal Service plans to seize items mailed with fake stamps

Featured Video

20221107korber large vs

Enhancing Customer Experience with Your Supply Chain Strategy

Viewer Contributed
With the rise of e-commerce, many businesses have had to transform their warehouses to handle online orders in addition to regularly scheduled inventory shipments. This means warehouses need more information than ever before to ensure they can meet customers' needs. As a result, companies need to select warehouse...

FEATURED WHITE PAPERS

  • Five tips for parcel success in 2023

  • Guide to Pallet Rack Safety

  • 3PLs: Complete Orders Faster with Flexible Automation

  • A shipper's guide to navigating post-pandemic holiday freight

View More

Subscribe to Supply Chain Quarterly

Get Your Subscription
  • SUBSCRIBE
  • E-NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing