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Changing Face of Procurement (From Reactive to Strategic)

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changing face of procurement

Changing Face of Procurement (From Reactive to Strategic)

Procurement has come a long way from a reactive function to being considered as a strategic partner. In the past, procurement or purchasing was primarily clerical. With the evolution of simple trade era to production era, revolution there was mass production and thus increased purchasing. In the past, procurement was not a preferred choice as a career.

I have been associated with the professional development of procurement and supply chain team all over the world for the last 3 decades. Before starting any Staff Development Program, I normally ask the question; “how many of you chose Procurement as a career?”

In the past, only two or three will raise the hand&it was considered a big number. It seemed that the majority of “Procurement” people fell into the job (back then it was considered a job as opposed to a profession), mostly by circumstance than by choice. Having a career in purchasing was similar in that no one else seemed to want the job, so you took it.

The world of procurement has suffered from a poor reputation, but in recent years we have become more strategic, more aligned with commercial value and better at understanding risk.

The way procurement is being viewed is slowly but surely changing. Now the focus is to move away from being only a cost savings to a growth partner. The increasing share of material costs and purchased services in major global organizations Profit & Loss account highlights its growing significance.

Like the tagline from that old commercial . . . we’ve come a long way things are much different today.

With increased globalization and integration, it will be appropriate to call  “Procurement” as “Supply Management” Its role has expanded in the supply chain. This is leading to calling Supply Management as a profession like its modish counterpart i.e. Marketing, Finance & Technology.

changing

With the above change, a strong need is being felt across industries that Supply Management skills are falling short of what organizations need. To meet the needs of industries & professionalize the above function, global standard for Procurement & Supply Chain function has been developed. These the benchmark for professionals at various levels i.e. Tactical Level, Operational Level, Managerial Level, Professional & Advanced Professional. ISM (Institute for Supply Management) and its chapters worldwide including UN organizations have been pursuing these by developing of certifications and training programs.

Best in class sourcing and supply management organizations need those who excel in the following capabilities:

1.  Commodity & Market Expertise

2.  Strategy Development

3.  SRM

4.  Source to Pay Process

5.  Technology Expertise

6.  Big Data and Analytics Capabilities

7.  Balancing Global Leverage with Local Fulfilment Needs

8.  Artificial Intelligence

9.  Leveraging Blockchain Technology

 The above long list the need for well-trained & certified Procurement & Supply Chain Professionals. Procurement is no more about spending money but to add value. This brings many exciting career opportunities.This also provides broad possibilities, multiple paths to pursue, roads to take, careers to choose. I see Procurement & Supply Chain in India at the same level as was IT a decade back.


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