The Evolution of Procurement
A look at how the process, technology and people of procurement have evolved to generate value beyond just savings.
Procurement is a profession that has a deep-rooted history. As long as humans have been trading and purchasing goods and services amongst each other, they have been engaging in a form of procurement. But procurement encompasses so much more than just a textbook definition of acquiring lowest-cost goods or services; it is a wide range of activities that enables an organization to operate more profitably and creating value.
Simply put, creating value in procurement is focusing on aspects beyond “just” savings. The role of value in procurement break out of its traditional mode and moves the function into other areas of the business and the supply chain.
A more comprehensive explanation comes courtesy of the CPO at Thyssen Krupp in Procurement and Supply Magazine:
“At the strategic level Procurement value can be defined by:
- Becoming a Customer facing capability
- Connecting commercial and technical capabilities of the Company
- Activating key supplier relationships
- Reducing supply vulnerability; accessing new products, R&D and innovation
- Lowering costs
- Delivering high quality goods and services
- Creating transparency across the Companies spend activities."
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