Procurement Gaining Supply Chain Visibility

Procurement professionals can add value in their companies’ businesses by taking a stronger role in supply chain management, according to Accenture’s new 2011 procurement research study, Compulsive Contributors: Accenture Research and Insights into High Performance in Procurement. The report designates this type of procurement professional as a “master,” and according to Accenture’s research, many such Chief Procurement Officers are now poised to influence their companies' financial performance. Supply chain visibility plays a key part here, but still represents a huge growth opportunity.

According to this report, 29 percent of procurement executives have little to no visibility into their supply base beyond the first-tier suppliers while masters integrate effectively with their supplier networks and go beyond their first tier of suppliers.

37 percent say they have “some visibility into operations of suppliers,” but do not actively manage those relationships. In other words, they have structures in place to manage risk, but handle adversities as they come up.

Just 10 percent say their procurement team “proactively manages” their supply chain, such as by conducting their own market research, analyzing costs, or monitoring suppliers. This puts them in a better position to respond before sudden disruptions impact their market share or financial performance.

Accenture discovered five key themes, or the core characteristics of procurement leaders’ best practices:

1) clear alignment of procurement strategies in sync with corporate and business functions’ accountabilities and metrics;
2) integrating effectively with supplier networks;
3) superior sourcing and category management;
4) controlling spend throughout the lifecycle and
5) the talent factor, hiring and retaining talent to support long-term success.

Drawing from these procurement best practices, Accenture identified four key areas to which over the next three to five years procurement standard bearers will focus more attention. These areas include sharpening their risk-management competencies; harnessing analytics to drive new insights; dedicating more effort to closed-loop spend management practices; and overhauling their approaches to talent management.

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