From Reactive to Strategic: Procurement's Evolutionary Journey in the Supply Chain

Evolution of procurement: from reacting to influencing

Procurement has a long-standing significance in business operations, serving as the foundation for sourcing and securing inventory efficiently before products or services enter the market. Across industries, organizations engage in procurement, from securing raw materials in pharmaceuticals to addressing IT needs in service-based companies. While the fundamental principles remain, the role of procurement has evolved significantly.

Over the past three years, Head of DSJ Global APAC, Matthew Monaghan, has witnessed significant changes within the procurement function across diverse industries. In this article, he delves into the driving forces behind this evolution, highlights the industry shifts that hiring managers should be aware of, and provides insights into how professionals can enhance their skills to secure a stronger position in the market.

The shift from reactive to strategic procurement

Historically, procurement reacted to changes such as increased demand or new product launches, and skilled procurement leaders managed these reactions to achieve desired outcomes. However, today's procurement landscape has entered a new era where Chief Procurement Officers (CPOs) hold executive roles. Beyond cost-saving, strategic sourcing, detailed category management, and transformative partnerships are now essential strategies for procurement to deliver multifaceted value.

​Cross-industry expertise and its significance

This transformation emphasizes the importance of cross-industry experience for supply chain professionals. Experts in negotiation from one sector can apply their skills to new industries, promoting strategic sourcing and procurement efficiency. For instance, negotiation experts in fast-moving consumer goods (FMCG) can transition to high-margin sectors like pharmaceuticals.

Navigating challenges and building influence

While established FMCG giants recognize procurement's role in improving the bottom line, achieving comparable influence in all high-margin blue-chip firms remains a journey. Influence emerges as a crucial skill for procurement professionals. Those armed with a mandate for change must effectively communicate the value of proposed changes to internal stakeholders, extending beyond monetary savings to intangible benefits.

Internal sales: converging skill sets

Procurement and sales, seemingly opposing functions, share crucial skill sets. Proactive procurement, especially in category management, involves anticipating business needs and persuasively conveying changes to stakeholders. Emotional intelligence, an unconventional soft skill in procurement, plays a pivotal role in shaping outcomes through persuasive communication and influence.

Crafting a new skill set for success

In the evolving procurement landscape, success depends on individuals who leverage their emotional intelligence for influence. While cost savings remain essential, adept procurement professionals focus on business partnering, engagement strategies, and value addition. Beyond showcasing cost-saving achievements, skilled professionals articulate unique value propositions that align with stakeholder needs and objectives.

Whether you are a hiring manager or an industry professional looking to excel in the realm of supply chain procurement, DSJ Global is your strategic ally. Our proven track record in connecting talented individuals with outstanding organisations ensures that you're positioned for success in this ever-evolving market. Request a call back today to find out more.