On the eve of the Institute for Supply Management’s 98th Annual International Supply Management Conference in Dallas-Fort Worth, there is a lot for procurement, sourcing, and buying professionals to be excited about. Yet many challenges still lie ahead.
There is little doubt that the Great Recession further elevated the procurement and sourcing function to the forefront as organizations, forced upon a renewed focus on cost savings, rationalized every cost center they could to stay afloat — much less competitive — during rough economic times. And when arguably the world’s most influential company, Apple, named its chief procurement officer, Tim Cook (who was a close confidant of Steve Jobs), to succeed the late visionary as CEO in 2011, the move only cemented down C-suite acceptance and overall recognition for procurement executives and professionals.
Fast forward to 2013, and with the economy and many businesses still fighting their collective way out of stagnancy, much of company profitability still hinges on maximizing cost efficiencies, presenting procurement executives and departments with ever more opportunities to be important cogs to fiscal success. With top-line growth remaining aloof, practitioners are being relied on to instill innovative methods and processes that create a lean and effective supply base. The average procurement department manages about 60 percent of total enterprise spend; that number is bound to go up.
There is plenty happening to aid procurement professionals’ progress and even expand their horizons. E-procurement technology continues to evolve, taking transparency into the supply chain to unprecedented levels and making data mining a richer and worthwhile process. Total cost and should-cost models and supply risk management are methodologies that continue to influence sourcing and buying decisions on a growing basis. Open supplier and business networks are enabling companies to establish partner-oriented and strategic sourcing relationships, with greater interaction levels and highly coordinated processes. And MRO still remains an area that can be wrought to value through strategic procurement practices.
Not to mention supplier diversity and corporate social responsibility and sustainability, these trends and movements are just a few examples of how the purchasing function is ever evolving and changing the way procurement departments must operate. And procurement execs and managers will be doing this with resource constraints, i.e., fewer personnel and lower budgets with greater demands from up top – that’s no eye-opener.
Procurement professionals will thus have to dig deeper. They will have to work even more closely with their suppliers, sharing data, sharing risks, and gaining valuable supply chain knowledge through that share – and they have these tools, as mentioned above. Also, as they become highly strategic and evolve into key organizational leaders, they will have to raise their game with internal clients and stakeholders, getting spend visibility, aligning spend goals with business department projects and initiatives, building trust while managing compliance, and being proactive in understanding how marketplace dynamics and outside forces affect both buying decisions and the overall company mission.
Overhauling staid, inefficient client approaches to establish powerful and lasting category management will require cross-functional collaboration driven by professionalism, team-building skills, and, perhaps most of all, leadership. Indeed, it is fitting that this year’s ISM conference theme is “Be the Solution.”
So it is on the eve of the ISM conference that ThomasNet launches IMT Procurement Journal. For ThomasNet, the industry’s leading free platform for industrial/commercial product sourcing and supplier discovery, it made perfect sense to bring you coverage of the subject matter most important to your craft and everyday success. In fact, New York City-based ThomasNet and its parent company, Thomas Publishing Inc., which was founded in 1898, was instrumental in the formations of what is now ISM-New York and the national ISM organization, with which the company maintains deep relationships today.
We are excited with this undertaking to provide informative and engaging content on sourcing, spend management, supplier measurement, and other important topics with an industrial focus. And it is the right time for diving right in, as we will be at ISM – the biggest event of the year for procurement — with scheduled interviews with industry experts and ISM leaders. They include Keith Hines, director at PricewaterhouseCoopers and president-elect of ISM-New York; Brad Holcomb, chair of the Manufacturing Business Survey Committee for ISM; and Thomas Derry, CEO of ISM.
Stay tuned to IMT Procurement Journal in the days ahead for exciting ISM coverage. And to borrow from ISM, we hope to be your solution for procurement thought leadership.