This checklist is intended to help Procurement professionals take a critical look at how their procurement functions add value to their organization.
Go ahead and take 30 minutes to consider these questions. There aren't necessarily any right answers. These questions are meant to trigger the critical self-analysis that will help you discover what you could be doing better or differently.
Procurement Alignment Checklist
Strategy and Tactics
- Is your procurement organization too tactical?
- Are your business objectives based solely on execution and cost-cutting metrics?
- Are you measuring price variance against what you achieved last year? Or are pursuing truer measurements, like comparing your price variance against that of the market?
- Are you partnering with your lines of business? Marketing requirements for supplier interaction and sourcing may be quite different from what IT says they need. Are you managing these internal relationships correctly?
- How are these partnerships driving risk reduction and increasing innovation?
- How do your executives perceive your cost reduction initiatives?
- Will your CFO counterpart stand behind your savings numbers and initiatives?
- Are you partnering with Finance to manage cost reductions and manage risk?
- Do you have the right talent working for you? Do you have employees that can wear different hats and think on their feet?
- Does each employee understand the concepts of TCO (total cost of ownership) and risk premiums?
- Do your employees appreciate that putting your suppliers into a negative NPV situation could drive them out of business and put you at risk?
- Does each employee know your top suppliers? How about Tier 2 and Tier 3 suppliers?
- How adept is your staff at building relationships?
- Are you following an industry leading process to help you manage the group? Six Sigma, Agile, etc?
- How are you keeping your employees current on process improvements, new technologies, and best practices for supplier relationship management?
- Are you developing new procurement leaders?
- Who is your mentee?
- What type of procurement groups (ex. Procurement Leaders Forum) are you encouraging your staff to join and participate in to learn best practices?
- Are you investing enough in change management?
- Are your business peers telling you that they are tired of your emails, webinars, office hours, and personal meetings? If they haven’t, then you’re not communicating enough!
- Do employees know which tools are available to them? Are they trained to use those tools effectively?
- Do you understand the concepts of Vested Outsourcing/Relationship building? Think along the lines of working with your vendors, not on a Statement of Work, but rather a Statement of Outcome. Your suppliers are working with you on a set of stated objectives and those objectives should be met for success!
Procurement has the visibility into company spending. You are at the center. You have insight into R&D, Manufacturing, Customers, Internal Business partners. You hold the keys to introduce new initiatives that impact not just the bottom line, but the top line as well, through collaborative innovation.