Why Procurement understands the business
It’s essential for companies to realize the best return from the suppliermarket to come out of the winning end tomorrow. Hereby is an excellent connection between customer value and the supplier market an important condition for the success of the organization. Procurement can shape this connection when they at least stand with the business.
Top-down execution of the business strategy limits Procurement realizing the best return from the supplier market. The supplier market could have a serious impact on the business strategy and take the customer value to the next level, so Procurement sees over the next hill. After all Procurement only can be a serious interlocutor of the supplier market when they are a serious interlocutor of the business and helps determine the business strategy.
To be this interlucor Procurement knows and understands the business further than the front door of the organization. What are the developments in the customer markets, who are the players and what’s the customer value the organization delivers. What are the threats and opportunities as the organization sees it and what strategy the organization applies to realize topline and bottom line results. Ofcourse being a serious interlucor isn’t an end in itself, but just a basic requirement to realize the best return from the supplier market. The state of being an interlucotor can be reflected in the extend to which Procurement is judged on the bottomline results of the organization. Do we pull the same rope? For sure Procurement speaks the same language as the business, using the same words in a strategy that meets the strategy of the organization. The lines towards the business are open continuously, wherby the juices keep flowing. To this end Procurement participates in cross-functional project teams and knows who are the keyplayers in the organization.
As often, the importance of two-way-traffic also applies to managing the supplier market taking away the blockages so that every link in the proces can deliver it’s utmost contribution to the best customer value. Procurement can realize an exceellent starting position to make the difference between success and failure.