Many corporations have centralized their procurement operations over the past several years. Typically, the switch is from a local or regional procurement structure to a centrally led organization headed by a chief procurement officer (CPO).
Through their recruiting work for Spencer Stuart's Supply Chain Practice, Stewart Lumsden and David MacEachern have observed a recent trend toward CPO searches not only in manufacturing but also in service industries. These new CPO roles in service-driven organizations focus not only on spending across marketing, travel, information technology, consulting, real estate, security, transportation, and similar areas but also on enhancing customer satisfaction, quality, and on-time delivery. In many cases, the CPO has become a key strategic leader and advocate for greater operational effectiveness in everything from inventory to manufacturing, product design, cash flow, outsourcing, workflow, quality, and customer service.
To successfully effect a transformation to centrally managed procurement, Lumsden and MacEachern say, the CPO needs a number of critical capabilities, including:
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