Is supply chain swallowing up procurement?

Is supply chain swallowing up procurement?

Bonnie was quiet at dinner, and her father asked what was wrong. She said in school today, her 6th grade class was talking about careers and what their parents did for work.

Bonnie said her mother, Monica, was a senior buyer at a local electronics manufacturing plant. Other parents were small business owners, electricians, plumbers, teachers, members of local police and fire departments, and even a professional surfer. Bonnie’s friend Tyler’s father was a supply chain manager for an online marketplace, and the class voted his job “coolest and best.”

“Why can’t you get a cool job like Tyler’s dad, Mom?” asked Bonnie.

And that is one of the core problems in the procurement profession these days. The identity of the profession is changing, once again.

​Pandemic-related disruptions in consumer and industrial supply chains are making headlines, pushing the once relatively obscure work into the limelight. How companies manage their supply chains has become as important to a company’s success as financial health, market share and customer relationships.

And that is why many companies have reshuffled leadership, appointing managers from other functions to run supply chain operations. These managers often have limited or no procurement, planning or logistics background. The logic is that if the talented finance or marketing manager is now in charge of the supply chain, it must be important.

How companies manage their supply chains has become as important to a company’s success as financial health, market share and customer relationships.

In many companies, this expanded universe of supply chain management, with leadership from finance or marketing functions, is swallowing up the somewhat independent procurement function. Rather than actively driving the supply side of the business, the function may again be relegated into a subservient support role.

But we can change that.

Acknowledge the change in the business climate

Companies have finally discovered the importance of the supply chain and are adding resources to shore it up. Supply chain management is also more customer facing these days, so adding an existing customer-facing leader may actually be the best thing for the business.

Some procurement leaders may feel they have lost influence or leadership. But the increase in importance and scope of the supply chain function should lift all participants. Consumer-facing businesses must address questions and concerns about the origins of their products. Are they sustainably sourced? Free of forced labor? Fair trade? Procurement holds the answers and can shine here

The procurement function is only diminished if you think it is.

Procurement professionals are a resilient bunch. Embrace the change and get ready to contribute in an expanded scope with certainly higher visibility.

Own procurement’s core responsibilities

Sourcing, supplier performance and managing supply chain risk are procurement responsibilities that aren’t going away. If anything, these critical functions are becoming more important.

Those new to supply chain management, or in existing functions like planning, distribution or transportation, may not fully comprehend the complexities of the procurement process and how tough it is to manage a full range of global suppliers.

This is a perfect time to reinforce our reputation in an evolving organization by doing our jobs very well and teaching others about the nuances of supply management.

Take a leadership role

Prove that procurement is a significant business resource. A few ways to do that:

Serve on project teams. Participate in sales and operations planning. Support indirect spend efforts with internal clients. Increase supplier participation in R&D. Drive costs out of operations with creative supplier performance agreements. Streamline workflow to make the procurement process effective and efficient. The procurement function is only diminished if you think it is.

Take advantage of career development opportunities

Companies define the supply chain management organization differently. Some limit it to the traditional materials management functions such as procurement, planning, scheduling, logistics and inventory control. Others include a bevy of functions like sales and customer service.

Take a broader view and use change to your advantage. Dip your toes into other career opportunities in supply chain management to expand your career options. Working in procurement is not a life sentence.

Has the expanded importance of supply chain management diminished the procurement function? Or strengthened it? It depends on whom you ask. Monica thinks she has a pretty cool job. And by dessert time, Bonnie thought so as well.

This story was first published in our weekly newsletter, Supply Chain Dive: Procurement. Sign up here.

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