Читать книгу Profit from Procurement - Jose Oliveira Valentede - Страница 19

Someone I know joined as a CPO for a large global pharmaceutical company a few years ago, reporting to the CFO. Procurement was already a recognized function in the company. It had a fairly good-sized team for the spend, it had a good mix of strategic and operational resources both centrally and in the regions, and individuals within the function had good relationships with some of their counterparts in the business.

Prior to the new CPO's arrival, the Procurement function was reporting impressive savings—in fact upwards of 10% on some categories. They also had well-documented Procurement policies and procedures. The CPO had achieved some stellar results at previous blue-chip companies, leading Procurement to new heights in those organizations. On the surface, all the ingredients were there for this new CPO to aim to take Procurement to “the next level” straight away: that is to say, beyond savings. But this particular CPO didn't make that mistake. Rather, he was realistic about his starting point.

The reality was that Procurement was not involved in any of the important business discussions because it was not fully trusted. Key decisions around which drugs to bring to market, commercial viability of those drugs, which suppliers to invest in, and managing supply chain risk were not yet within their remit. Crucially, the savings they achieved were either not believed or not visible to the people in the business who mattered. The CPO knew this, and knew it before he had taken on the job. So, his first priority was to make the Procurement function known for simply delivering a cost benefit. From there he would build credibility.

Within the first two years, as well as cleaning up some of the administrative processes and reinvigorating his team and how it interacts with the business, he had delivered a program of savings that most of the company was behind and could see the benefits of. From there, the remit and mandate had expanded organically, as peers had seen how the approach that had helped to deliver cost benefit could also be used to help better manage supply chain risk with key suppliers—something that has a direct impact on revenue.

This is an example of a CPO who was confident and humble enough to understand the starting point of Procurement in his business and set the correct priorities and ambition. Had he tried to impose his function on other areas immediately, I'm certain his function would not be delivering as much value as it is today.