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Procurement of Procurement People Always a Challenge
Procurement (or purchasing, the terms are interchangeable) is, in a nutshell, buying goods and services for companies or public bodies.
However, the range of things you can buy and the variety of employers makes it a brilliant function to work in. What no definition can convey is the importance of procurement to a company.
According to Willie Walsh, the chief executive of British Airways - procurement can make or break a company.' the time, he was talking about the impact good procurement can have on a business, particularly when you take into account the size and scale of BA.
Alan Sugar also described procurement as 'an important aspect of any business.'
Within procurement, more and more emphasis is being placed on buying the right products and services to fit the longer term needs of the business, with the expectation of best value, total cost solutions being achieved rather than a simple quick, price focused fit.
Today, many companies are transforming their Purchasing and supply Chain functions in order to unlock even greater added value. They recognise that Procurement should be making more of a contribution to the bottom line profits and should also be providing a real competitive advantage. They also recognise that controlling and containing costs is a vital business imperative.
To be successful, Procurement not only has to understand the organisation's goals and overall strategy, they also need to understand the requirements of its own internal customers and be able to face the challenge of responding to today's constantly changing business environment, which is often affected by a range of factors including new customer needs, changing regulatory requirements and different ways of working.
Within procurement, there is more and more emphasis being placed on buying the right services to fit the longer term needs of the business, with the expectation of best value, total cost solutions being achieved rather than a simple quick, price focused fit.
There is a constant battle for buyers and suppliers to understand each other's needs and expectations and for them to work together to ensure that they develop the best possible relationships that will deliver successful business outcomes for both parties.
There has never been a better time to be in Procurement and good procurement people will always been in demand and be in a position of choice when deciding how and where to develop their careers.
Peter Smith, Founder of Procurement Excellence believes good procurement people can really advance their career in this recession provided they concentrate on adding value: "In this environment, interims and consultants need to focus very hard on what tangible value they really can add.
I expect to see contractor and consultant rates falling but there will also be opportunities for good people and firms - working on restructuring and post merger integration, driving out bottom-line savings and value for clients, and working on major capital investment projects in the public sector, utilities and energy.
There are few ways for a company to become more profitable and most fit under the headings of 'increased sales' or 'reduced costs'. When the latter is the only realistic option, the first reaction of too many organisations is to cut labour costs.
It's understandable as labour is the biggest cost to most organisations, but reducing the cost base and fostering the right relations with suppliers is not only a better first avenue, it puts an organisation in a far healthier state for when the upturn comes as Jonathan Patrick commented: "Businesses need to drive continued efficiencies and Procurement offers the vehicle to deliver this, not only through cost savings but also in helping to streamline operations which will build a platform ready for growth".
About the Author Search4procurement.com is the first job board to target senior procurement professionals. Whether you are looking to find a role or fill a vacancy, this is the only job board to specialise in procurement recruitment.
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