How can you build a procurement team that delivers value and results?

Building a winning procurement team is like forming a superhero squad. Seek diverse talents united by a common goal. Foster open communication and a culture of continuous learning. Embrace technology as a helpful ally. Treat suppliers as trusted partners. Cultivate an agile mindset to navigate changes effortlessly. Define measurable KPIs for success and celebrate victories together. Remember, it's a journey, so enjoy the process and keep refining your playbook!

A team can be formed when value for organisation is clearly defined i.e. reducing purchase lead times or savings on big ticket purchase, risk reduction etc. Value definition will help zero in skills required and then build or train a team. Team should get required training and authority to challenge stakeholders to drive what is required. Data and information should be available and cleansed for objective realisation. Effectiveness needs to be measured on multiple scales and not merely on savings. Lastly areas of improvement need to be identified by training and big wins to be appreciated by management so that stakeholders across company realise that procurement team is not just a compliance middle man but an informed consultant.

Important for the leader to ensure team understands the mission, vision and objectives. Accordingly, the kpis and strategies are aligned to contribute towards the ultimate organization goal. With capabilities expected to differ within the team, open communication should allow positivity and progress. With Procurement as the domain and passsionate/proactive leadership, the pride of being employed (paid by organization to spend organization's money) should spur the team towards value addition and not limit their inputs to principal accountabilities.

This is by no means an exhaustive list but my top areas to assess capabilities within a procurement team. a. Negotiation - How good is the team in managing cost savings and cost avoidance. b. Stakeholder & Relationship Management - How good is the team in managing their internal & external stakeholders. c. Commodity/Category Management - In depth know on the product/services, the market and the cost drivers. d. Project Management - Ability to manage sourcing events as projects, within the time frame and under the budget allocated. e. Supply Relationship Management - Ability to segregate their supplier base (core, strategic, non-strategic) to know where to focus their attention.

There is sometime a misconception that purchasing and procurement as the same thing. Purchasing being more tactical and procurement being more strategic. Procurement can be a strategic advantage when deployed correctly in organizations leading to some of the following achieved objectives. a. Cost Management - Deliver on cost savings, mitigating cost increases (cost avoidance) and process optimization. b. Strategic Advantage - Utilizing the supplier base to drive innovation. c. Strategic Partnership - Growing with identified strategic supply partners to mitigate risk. d. Risk Management - Understanding and reducing supply chain risks. e. Quality Management - Ensure quality control on products. f. Support NPD - Support new products.

Defining a clear procurement vision and objectives provides direction and purpose. By aligning these with broader business goals through tools like SMART goals and stakeholder mapping, we can ensure that our procurement activities deliver maximum value. Communicating this vision effectively to the team and stakeholders fosters a unified approach and drives collective effort towards common goals.

Invest in training and development for your procurement team. Equip them with the necessary skills, including negotiation, market analysis, project management, compliance, and contract management, to handle diverse challenges.

Recruiting and retaining top talent is essential for a robust procurement team. By defining clear job profiles and using effective recruitment channels, we can attract skilled professionals who align with our organizational culture. Continuous development and engagement through performance management systems ensure that our team remains motivated and innovative, driving sustained success.

Implement strategic sourcing practices that identify and engage with the right suppliers. Focus on building long-term relationships that contribute to cost savings and quality improvement.

Implementing best practices and processes ensures consistency and efficiency in procurement activities. By adhering to established standards and leveraging technology and analytics, we can optimize performance and decision-making. Tools like procurement frameworks and process maps help streamline operations and ensure compliance, quality, and continuous improvement.

Cultivate strong relations with key suppliers. Effective Supplier Relationship Management can lead to better collaboration, innovation, and responsiveness from suppliers. Extend this approach to other key stakeholders.

Effective relationship and risk management are key to successful procurement. Building strong stakeholder relationships fosters trust and collaboration, while proactive risk management ensures that potential issues are identified and mitigated early. Utilizing relationship management models and risk assessment tools helps maintain positive interactions and safeguard procurement outcomes.

Risk Mitigation (RM) = Risk Identification (RI) + Contingency Planning (CP) + Supplier Diversification (SD) RI: Identifying potential risks in the supply chain. CP: Developing contingency plans to manage and mitigate risks. SD: Diversifying suppliers to reduce dependency and spread risk.

Encourage a culture of continuous improvement within the team. Regularly assess processes, learn from experiences, and adapt strategies to stay agile in a dynamic business environment.

Continuous innovation and improvement are vital for staying competitive in procurement. Encouraging a culture of creativity and experimentation helps uncover new opportunities and solutions. By systematically monitoring and learning from results and feedback, we can implement informed changes that drive ongoing enhancement and success.

Performance (P) = Key Performance Indicators (KPI) + Regular Reviews (RR) + Feedback (F) KPI: Establishing clear KPIs to measure procurement performance. RR: Conducting regular reviews to assess progress and make adjustments. F: Gathering feedback from stakeholders to improve processes and relationships.

1. Sync Procurement with Business Vision for Maximum Impact 2. Attract and Empower Top Talent to Drive Success 3. Harness Cutting-Edge Tech and Data for Smarter Decisions 4. Build Strong Supplier and Stakeholder Partnerships 5. Set the Gold Standard with Proven Processes 6. Foster a Culture of Innovation and Continuous Growth

Some other points to consider includes a. Cross-Functional Collaboration - Foster collaboration with other departments like finance, operations and legal. b. Technology Integration - Leverage procurement technologies to streamline processes, enhance transparency and provide data driven insights. c. Risk Management - Develop robust risk management strategies to anticipate and mitigate potential issues in the supply chain. d. Performance Metrics - Establish key performance metrics (KPIs) to measure the effectiveness of your procurement team. e. Ethical and Sustainable Practices - Integrate ethical and sustainable practices into procurement processes.

Build a high-performing procurement team by defining clear goals and objectives, hiring experienced professionals, organizing a structured team, providing training and development, fostering collaboration and communication, establishing performance metrics, leveraging innovation and technology, developing strategic supplier relationships, implementing risk management, and encouraging continuous improvement. This will deliver robust results and high standard values.

Innovation and Continuous Improvement Formula Innovation (I) = Encouraging Creativity (C) + Investment in R&D (R&D) + Benchmarking (B) C: Encouraging the team to come up with innovative solutions. R&D: Investing in research and development to stay ahead of industry trends. B: Benchmarking against best practices and competitors.