Delivering value in Auckland: Insight from NZ’s CPOs

After a near four-year hiatus, Procurement Leaders is delighted to be back and in person in Auckland again. Last week, we gathered together New Zealand’s most progressive leaders. They shared their insights on how to explore new sources of value for procurement, as well as how to sell it.

Here are three examples that resonated with me.

Think broader

With the waves of inflation that have assailed the global supply chain, New Zealand’s leaders, like many others, have found savings harder to root out. CPOs are urging their teams to find commercial efficiencies, avoid costs or investigate other, less traditional aspects of the buying role.

Many delegates noted how procurement was increasingly taking the lead on risk management. Now that sustainability and visibility are higher on the corporate agenda, buyers can wield significant value by identifying, quantifying and helping the business mitigate risk. ?

Even where specialist functions exist, procurement can offer leadership. A delegate shared how although his organisation possessed a risk team, they didn’t understand the nature of third-party risk. Buyers had to lean in to help spot and evaluate the exposure, such that the risk group could better report vulnerabilities to the wider business.

Closing the gap in insights – such as supply chain vulnerabilities – will be highly sought after by all organisations.

Procurement supporting employees in the cost of living crisis

One representative explained how procurement could positively impact the lives of all its employees through sharper contract management. “We’re asking suppliers how they’re offering value for our employees in the cost of living crisis.” This comes through in terms of staff discounts or other offerings, that can meaningfully impact colleagues through challenging times.

Not only is creativity required in finding avenues of value for procurement. Good leaders need to sell it too.

Selling the value to the business

“We don’t know how to sell out skills as procurement,” noted one CPO. Which is an issue we frequently find within the function across the globe. But she gave a further example: “We don’t talk about ‘investment’, we talk about ‘cost’.”

This is a significant mindset shift for stakeholders. That is, not only to treat suppliers as a drain on resources but rather to consider each invoice as an investment that helps grow your businesses. This is helpful in moving us from maximising the ROI of each engagement, as opposed to blindly looking for ways to shrink, or even eliminate it.

Those buyers, category managers and even CPOs that can recast this perspective of the supply base, they can also change the value proposition of procurement.

Showing the value of procurement, through stories such as these, will be central to the function in a post-inflationary age. But, those executives that can develop this skill, they can shape the business as a whole.

“If you sell the story,” said one CPO, “it really moves the board.”

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