Sales organizations have understood how to identify the real power of procurement and map how to plan the sales process and manage the relationships across the organization to improved margins.

1. Missing Bricks for Value Creation
Sales organizations have understood how to identify the real power of procurement and map how to plan the
sales process and manage the relationships across the organization to improved margins.
Price
TCO
ROI
Focused
Focused
Focused
Overhead
Process
Cost
Specifications
& Operations
Relationship with stakeholders
How align is procurement with
stakeholders?
Managing the administration of
the buying process
Managing the procurement
project costs and ad-hoc
support on demand
Early Involvement
At what time during the buying
process is procurement
involved?
Buying Process
Does procurement use a
category management
approach?
Spend Visibility
Does procurement follow CapEx
& OpEx evolution?
Late involved after stakeholder
requirements & targets are set.
Supporting stakeholder in
sourcing methods and project
execution
No formal category
management function
Category Management with
internal focus. Limited category
expertise
No OpEx & CapEx visibility
Visibility and centralization of
spend. Procurement managing
less than 65% of spend
Stakeholders driving supplier
relationships.
Multi-channel communications
where procurement is a bi-role
Measured on yearly (PPV)
Purchase price variation savings
Main KPIs – PPV, TCO reduction
& customer satisfaction
Decentralized and highly
fragmented. Head of
procurement reporting to
finance director
Centralized structure by Group
& national organization. Direct
Reporting line to CFO
Not involved after contract kickoff
No formal performance
management approach.
Supporting stakeholders with
ad-hoc vendor performance
issues
No assessment of supplier
capacity & capability…
Mapping and analysing supplier
capacity & capability and
aligning those with business
objectives
Supplier Relationship
management
Who is driving the
communication channel?
Procurement Performance
metrics
What are the procurement
KPIs?
Organization & Reporting
How the department is
structured & where does the
function report to?
Supplier performance
management
What is the procurement
responsibilities in the
continuous supplier
performance?
Supplier Portfolio management
Joint market
development
Early involvement during
concept planning, tight and
align relationship to jointly plan
and create value
Supporting stakeholder as a
member of cross functional
team, supporting project
specifications & targets
Expert category knowledge with
up to date market & trends
insights
Acting on CapEx & OpEx
deviations and company
revenue.. +65% of spend
through vendor base
Engage supplier by on-going
events & workshops, to align
business and drive growth
Main KPIs - realized cost
savings, Working capital
reduction. Customer &
Stakeholder satisfaction
Centralized and decentralized
structure by
Group/regional/national
organization. Direct Reporting
line to CEO
Lead the performance
management process with
objective to root cause problem
resolution. Conducting regular
performance meetings.
Mapping and analysing supplier
capacity & capability, driving
innovation and using the
vendor performance for
business application & portfolio
positioning
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