Supply Chain Outlook Summit: Procurement’s Value Proposition

The upcoming Supply Chain Outlook Summit will feature 10 different speakers who have their fingers on the pulse of the most important changes impacting supply chain management over the next 2-3 years. At the event, Rob Handfield, Ph.D., will discuss why this is the “golden age” of procurement and provide key strategies that purchasing departments can use to get a seat at the supply chain table in 2015 and beyond.

As the Bank of America University Distinguished Professor of Supply Chain Management at North Carolina State University, and executive director of the Supply Chain Resource Cooperative, Handfield serves as faculty lead for the Manufacturing Analytics group within the International Institute of Analytics. He’s also on the Faculty for Operations Research Curriculum at NC State University and has consulted with more than 25 different Fortune 500 companies.

In this Q&A with Supply Chain Outlook, Handfield outlines why and how procurement departments must become more engaged in executive board decisions and planning. He also examines the key contributions to enterprise value that an empowered procurement function can provide, beyond just “stacking ’em higher and buying ’em cheaper.” 

SCO:  Why is this topic important for supply chain managers to be thinking about right now?

Handfield:  The topic coincides with a book we published last year entitled, The Procurement Value Proposition. When writing the book, we started talking about how procurement regularly complained that it didn’t have a seat at the table. It wasn’t being taken seriously.

SCO:  Why should procurement be taken more seriously in this regard?

Handfield:  When you talk about creating value in procurement, you have to realize what your stakeholder requirements are and what is and isn’t important to your firm’s bottom line and/or performance objectives. From there, you can try to work through the steps it takes to achieve those goals, be it through building market intelligence, identifying risks, or being very good at drafting and building out contracts. All of these functions fall onto the shoulders of the procurement department. 

SCO:  Do you find that companies recognize these dynamics, or not?

Handfield:  Some do, others don’t. In the automotive and electronics industries, for example, there’s a great deal of recognition of procurement’s value. Buyers are brought in early and viewed as stakeholders in everything from product development to innovative cost management.

SCO:  Why is this so difficult for companies to tackle?

Handfield:  In many cases it comes down to the data…or a lack thereof. Without good information – or a least a baseline to start from – the task of involving procurement in the supply chain function can be challenging. Leadership is another challenging point. It takes someone with vision and the ability to meet with and understand stakeholders to build a business case. Finally, you need to have the people on board who are willing to tackle these types of problems. These individuals must not only be smart, but they also have to be analytically-driven and able to interact with teams. That’s not always easy to find in today’s labor pool.

For more information on sessions like this, visit the Supply Chain Summit website. To register for the event, click here.