10 Procurement Value Creation Ideas, Part I

Here are the first of 10 procurement value creation ideas we’ll be sharing in this two-part series:

1. Speed Up “Time To Customer.” Identify products or services that your organization provides to its customers where time to delivery/completion is important to the customers. Identify purchased products and services that are part of, or support, what is provided to the customer. Then, identify ways to speed up your supply base’s delivery of those purchased products and services so that your organization can serve its customers more quickly.
2. Improve Quality To The Customer. Identify products or services that your organization provides to its customers that do not consistently meet customer quality requirements. Identify purchased products and services that are part of, or support, what is provided to the customer. Then, identify ways to work with your supply base to improve the quality of those purchased products and services in a way that will improve quality as measured by the customer.
3. Improve Efficiency Within The Organization. Identify the resources and time involved in each of your major procurement processes. Identify ways to reduce the number of steps, participants, and time required to complete those procurement processes without sacrificing quality or integrity. Also identify processes whose timelines are influenced by supplier performance. Identify how these processes can be made more efficient through better supplier performance or reengineered approaches to interacting with suppliers.
4. Funnel Innovative Ideas Into The Organization. Employees in your supply base observe the best practices in your industry and may have innovative ideas to share. Solicit, vet, and introduce their innovative ideas to your organization.
5. Minimize Risk. Identify the most critical products and services your organization purchases. Identify all of the reasons your supply of those products and services can be disrupted. Then, identify the actions you can take to prevent supply disruptions and recover from supply disruptions if they still end up happening.

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Procurement has an incredible capability for creating value and can do so in many ways. Unfortunately, many senior executives – and, admittedly, even some procurement professionals – do not understand all of the ways that procurement can create value.

Don’t let this be a problem for you. Download our new “Procurement Value Creation Workbook.” You’ll gain a thorough understanding of 10 ways that procurement can create value and be challenged to formulate your own ideas on how you can create procurement value for your organization.