Increased competition, higher customer expectations and shifting attitudes and awareness towards the environment and sustainability are a few of the pressures impacting the ever-changing world of procurement. Expected lifetime of a product is becoming ever shorter. Additionally supply chains are growing longer and are getting more complex. Companies have new exposures in new geographic regions, and the interconnected nature of the global economy makes problems more, not less, likely to arise. The likelihood of supply chain disruptions or brand-impacting events has increased, as well as their potential visibility in our hyper-connected world.
Procurement professionals who have taken on tasks or a role in Sustainable Procurement and CSR in the supply chain are gaining valuable skills to grapple with these challenges. For successful implementation of sustainable procurement, professionals must learn and use skills such as an entrepreneurial approach, a collaborative mind-set and a business-driven strategic view.How can procurement professionals benefit further from these skills in their career?
Procurement will have to work in a much more cross-functional role. Most procurement pro’s agree that without the alignment and symbiosis of other departments, procurement has little power. Strong team playing skills as well as strong internal and external networking skills are key competences.
Having said that, if a procurement professional possesses these collaboration skills, then they have a great opportunity to apply them in a business development role.
As Gerard Chick, Chief Knowledge Officer and Optimum Procurement says:
“Procurement must be the function that is continually challenging ways of working. Looking to ensure it help its internal business stakeholders achieve their goals and targets whilst, at the same time, taking the opportunity to challenge total cost, facilitate customer of choice benefits such as access to innovation and of course the management of risk. Most critical of all is, that procurement must be aligned to the corporate focus addressing the key question for any business: What it the value for the customer?” Check out the article here.
Entrepreneurial, With a Life-Cycle View
The entrepreneurial mindset is key when it comes to developing new partnerships and new products. It is also key in relation to the existing products, which could be challenged by good product stewardship. Good product stewardship practically means that you use a life-cycle approach. Using a life-cycle approach will help visualize the hot spots in the products, help develop product design scenarios and support the organization in engaging and collaborating with key stakeholders, to ensure improvements are implemented.
Taking a life-cycle view means finding the “innovation sweet-spot” where consumer needs, environmental impact and technical and business capabilities converge. Taking a lifecycle view also ensures, that improvements made in design actually do translate into measurable improvements in environmental performance.
Once you have experience with a responsible procurement project, you bring valuable examples and perspective on all these aspects to every new project and product team you work on within your career. Good entrepreneurial skills are also a good sign of a person’s ability to adapt to changes and typically something which is highly sought after with new potential employers.
Business-Driven Relationship Development
In the past, if you asked a procurement professional where innovation happens they would typically answer: in other parts of the organization. They are not used to innovation happening outside the company, for example in their supply chain, and with the supplier. The changing business environment demands a much faster development pace, so supplier innovation is key to success. Procurement professionals have a key role to play as supplier coach and communicator.
In many companies, and procurement functions, it is typically a challenge to include suppliers in the front end of the innovation process. Procurement teams are often disconnected from the functions they serve and the markets they engage with. They are not fluent in the nuances of the business and hence lack experience and authority. A good business understanding can lead to many exciting roles within or outside the company.
CPOs Seeking To Reap The Benefits
Looking backward, cost reduction was often considered the number-one priority in the eyes of the CPO. The new commercially-focused demands are rocking this traditional area of procurement strength. Globalisation has proven to be more about revenue growth than cost savings. Spend management is shrinking and the focus is now on sustained profitability.
That is why now CPOs are seeking to hire and promote those professionals with skills like strategic thinking, a business driven collaborative mind-set and an entrepreneurial total-cost-of- ownership approach. These skills are essential if you want to work in Sustainable Procurement. So even though CSR and Sustainable Procurement might not be the number one priority within your company, it is a great proxy for those skills.
Author: Alis Sindbjerg Hemmingsen
First published in theSustainable Supply Views blog from EcoVadis
EcoVadis is the CSR rating platform for supply chains spanning 150 sectors and 99 countries of Global-500 enterprises like Verizon, Coca Cola Enterprises, Johnson & Johnson and 100 others. EcoVadis Scorecards make it easy to understand, track and improve suppliers’ environmental, social and ethical performance. www.ecovadis.com