ProcureCon 2010 Industry Outlook & Topical Framework: Addressing the Post-Recession Supply Base

PaaS, Team Skill-Set Building, Talent Mgt, M&A Integration, Demand Mgt

Our market research tells us that this is the year that good procurement practice might focus on positioning itself as a better strategic partner to business users; i.e, ‘Procurement-as-a-Service’ or ‘PaaS’. This requires building your team’s skill-set & culture to support procurement’s strategic service proposition throughout the different phases of the transformational process. Your procurement team needs to become an extension and fully vested partner of your organization’s individual business units and cross-functional teams, building a bridge between procurement and end users. Only then will you jointly achieve maximum value add.

Green, Sustainability, Supplier Co-Innovation, Lean/Six Sigma, Emerging regulations (Carbon trade tariffs)

When we queried procurement executives further on their near term strategic goals, Sustainability, Mitigating Supply Risk and Supplier Value Contribution came up consistently. To elaborate:

Sustainability
ProcureCon 2007 incorporated a content-rich focus day on sustainability & green with only 12 delegates electing to stay for this Friday session. Participants were, however, rewarded by an insightfully engaging treatment of truly cutting edge issues in this rapidly emerging mandate for all industries and clearly were pioneers among their peers. Subsequent years’ research yielded only a minimal interest in green topics.

We were told: “By all means, include a session but focus on quick wins, because we don’t have time or resources to take this initiative any further.” We sense, however, that procurement may embrace sustainability and green opportunities more aggressively in 2010. Walmart and Dell do well in this space but point their efforts primarily toward prerequisites for supply chain partners. How are companies driving these initiatives into their own internal supply chain and procurement processes?

Assuring Supply, Sub-tier Risk Mitigation, LCC Sourcing Challenges, IP Protection

Mitigating Supply Risk
Now that procurement has been blind-sided in recent experience by suppliers’ failure to deliver on obligations due to fiscal struggles, you have implemented proactive monitoring systems of financial and economic factors and created contingency plans to secure supply continuity of mission critical commodities and materials – the infamous top 20%.

The questions emerge: What if supply risk infects your tier two or three group? An unforeseen business failure in this sector may well precipitate disruption of production and ultimately impact revenue. How do you methodically and routinely audit your sub-tier suppliers’ solvency? How do you expand your risk monitoring efforts to include geographic, natural disaster, political and social risk factors as well? This is the extent and depth to which ProcureCon aims to address supply risk in 2010.

Supplier Segmentation & Scorecards, Value Add Best Practices, Modern Communication Tools, Waste mgt, Contracting Strategy

Supplier Value Contribution
Will your suppliers innovate or retaliate? Hopefully you are a procurement executive who achieved more than just squeezing your suppliers for an extra bit of savings during the recession and were able to forge stronger strategic partnerships with your key suppliers. Your suppliers can add tremendous value to all your key business objectives: from new product development, process improvement, competitive advantage and sustainability initiatives to demand generation and creative cost-savings efforts. Yet many of you haven’t fully realized what strategic suppliers have to offer through long-term partnerships.

Another focus of ProcureCon 2010 is a harvest of additional latent value elements from existing contracts.

SRM in times of recovery, Scorecarding, Higher value metrics/KPIs, Finance partnership

To comment or share your ideas, please email me at carina.kuhl@wbresearch.com or call me at +1.646.200.7461

Respectfully submitted by:

Carina Kuhl
Executive Director, ProcureCon
carina.kuhl@wbresearch.com