I can’t remember the first time I saw some article/white paper with that topic and blaring title but it was a looong time ago. And I betcha if you google it today you would get a large number of hits. We have also spoken on this topic at many conferences worldwide, written about it multiple times and hosted executive workshops – in fact, our next PERT event is on this topic. One thing I’ve always been surprised by is that almost no one ever talks about the impact that this role can have on the top line. I’ve never understood why we don’t talk about what we can do to impact customers, sales cycles, revenue, etc., etc..
The team representing the customer in any sales cycle invariably has a heavy component of Procurement / Supply Chain. Logic dictates that if we also got involved in the team representing our company in the sales cycle, it would add a lot of credibility and shorten the sales cycle. Who better to understand what the issues and concerns of Procurement are than Procurement? Who better to educate the sales function on how to deal with the Customer’s procurement function and what the sourcing process looks for? Who better to mine the supply base for intelligence and product/service innovation tied directly to customer needs? And who better to understand the issues and concerns that customers have and then incorporate them in our Category and Supply Chain strategies? Why then doesn’t every Procurement/Supply Chain function have people dedicated to supporting sales and revenue? Surely it’s time that we took on that responsibility and can you imagine the effect that would have on making the function more value added and strategic in nature? And to support this construct, why wouldn’t we insist on making sure that the Procurement function was part of the sales team from every critical supplier in our supply base? Selfishly, that would surely increase the overall compensation of our function in the market 🙂 .
Similarly, our influence on developing new products (please assume services are included in this discussion also) is vastly under-utilized. We are and should be the conduit in integrating intelligence from the customer and the supply base and working with the engineering function to provide guidance in developing new products. Many a time we have seen clients go down the path of developing new products and realize quite late in the process that the product is not really the best match for the market or that the supply base cannot really support the product. This often lead to significant reworks of the design and delays in Time to Market (TTM) and TTM is often a major competitive differentiator. Too often we have seen clients wanting to enter new geographical markets and been stymied by the lack of a supply base to support market entry. In almost all of these cases, Procurement has not been involved early in the process and by the time they do get involved, they have very little opportunity to affect the outcome.
Any redefinition of the role of our function must involve the outcomes that we are engaged in. Ensuring supply and impacting costs, while always critical, cannot continue to be the raison de etre of our existence because then we are not really redefining our fundamental role. That is why the members of PERT decided to revisit this topic at our upcoming workshop on July 11th at the Shedd Aquarium in Chicago. We will look at the role and seek to redefine it through the prism of: Revenue, Corporate Risk, Strategic Work Planning, and Marketing. While these may not sound like the traditional corporate outcomes our function is involved in, that’s exactly the point 🙂 . I hope you will be able to join us and help fundamentally redefine the function.