How Should Boards Think About Procurement?
In a pre-Pandemic world, if I were to have asked a procurement officer or a chief financial officer, “what do you hope to accomplish with procurement?” the answer would have been straightforward: cost savings. In a post-Pandemic world with an elevated and persistent interest in social justice, the response is likely to be fundamentally different.
When Will Companies See Procurement as Strategic?
“Organizations should build financial models that size the impact of various shock scenarios and decide how much ‘insurance’ to buy through the mitigation of specific gaps, such as by establishing dual supply sources or relocating production. The analytical underpinnings of this risk analysis are well understood in other domains, such as the financial sector – now is the time to apply them to supply chains.” [emphasis added]
Strategic Sourcing Is Risk Management
We live in a connected world. Personally, we’re part of families, companies, and social networks. Our organizations are tied together inextricably. We have suppliers, customers, partners, regulators, tax collectors, and communities. Everything exists in connection to nature and in the context of technology.