If you still think of your process as purchasing, you are living in the 1960s. Competition today is no longer company to company, but rather supply chain to supply chain. Since many of us in the same industries use many of the same suppliers, a good procurement process must evolve into fully integrated supply management. How you answer the 10 questions outlined here tells whether your supply management organization is a strategic resource or just a drain on corporate competitiveness.

The company that does the best job of integrating its supply network?in terms of objectives, strategies, processes, and data linkage?creates optimal competitive advantage for the entire supply network and optimal value for its shareholders and customers. Exhibit 1 provides a snapshot of what organizations look like before and after transformation.

Take a quick pulse to determine if your supply organization is alive and well or a significant drag on your corporate competitiveness. Ask the following 10 questions. You should have a good sense of the answers yourself. Following the list, we present what we feel are the right and wrong answers.

1. Are supply chain goals integrated into the strategic plan of your business?

2. Do you know who your chief purchasing professional is?

3. What is the reporting relationship of the chief procurement officer to you? Does he or she have consistent access to you and other senior-level executives? Does he or she make presentations to the board of directors?

4. Does your procurement team have top- and bottom-line objectives? How do you set stretch objectives? Are procurement’s objectives shared by other functions in the company?

5. What percentage of the external spend at your company is supervised by purchasing and covered by a written strategic-sourcing plan?

6. What percentage of spend is leveraged through internal spend pools?

7. Do you have the right leadership in your procurement function? Is your procurement head a leader, a follower, or roadkill?

8. What is the working relationship between purchasing professionals and those in other disciplines (manufacturing, engineering, R&D, finance, etc.)? Do they operate in silos?

9. What are the opportunities for training and improvement for the purchasing professionals in your company?

10. And most important: What is your level of personal commitment to achieving improved corporate performance through a best-in-class purchasing organization?

For the answers please click here.

Source: Supply Chain Management Review

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