Have you set up procurement to deliver top value?

Ten questions to find the Gap

Can you (or your delegate) answer most questions/statements with a strong 'yes'?

  1. Our procurement organization is structured in alignment with the overall company organization, whether it be centrally, by business unit, or by geography. 

  2. We have minimal disruptions in our supply chain, including delayed deliveries and unexpected increases in material costs. 

  3. Performance is consistently tracked throughout the company, including metrics such as cost reduction, number of suppliers, procurement-to-payment time, and greenhouse gas emissions of suppliers and other sustainability metrics.

  4. Our procurement organization is competitive within our industry in terms of productivity and spending per employee. 

  5. Each division, business unit, and function within our company feel that they receive value from procurement efforts. 

  6. Our procurement is adequately funded and this is acknowledged by the head of procurement/supply chain and through industry benchmarks. 

  7. Our supply base is smaller in comparison to our competitors. 

  8. Our procurement team is incentivized based on the overall performance of the business area they are connected to. 

  9. The corporate overhead for this function is less than 10% of the overall cost. 

  10. Procurement does not report to the head of the supply chain unless the person held a previous position as the chief procurement officer.

If you answered ‘yes’ to most questions, great!

You created an integrative organizational design, assuring high operational performance.

If you answered ‘no’ or are unsure about it, you have most likely an excellent opportunity to improve your margins and customer experience.

Feel free to get in contact for an exploratory dialogue with helmig advisory AG to assess the art of the possible.

Previous

Planning for the increasingly unexpected