Why procurement and suppliers should be on the board agenda - the company ecosystem

In the past companies viewed suppliers as a source of savings only and within a limited financial context. Procurement was often part of the financial departement and not on the CEO`s agenda, let alene on the agenda of the board. This has to change. Being part of the companys ecosystem procurement is vital to its future sustainability.

The Pareto principle (80/20 rule) also applies to suppliers. Roughly 80 percent of a company's procurement expenditure goes to the top 100-200 suppliers. The suppliers should be treated accordingly, with customized strategies. Approaches with a partnership mindset addressing specific challenges to top suppliers has a tremendous cost saving potential. Smart companies make cost savings the start of an enduring relationship.

In the next weeks I will share with you the topic that I am most passionate about these days - why procurement and suppliers should be on the board agenda. Feel free to share and comment on this article.

Previous articles

• Why procurement and suppliers should be on the boards agenda - an introduction

Upcoming articles

• Procurement as value added
• Procurement and sustainability (why it is vital)
• Procurement and product life cycle
• Procurement and strategy
• Procurement and risk reduction
• Procurement and leadership imperative
• Procurement and the board
• Looking forward - the one competence the board cannot afford not to focus on (and how the world is changing)
• Adding it all together