We plan to launch a procurement department. Now What?

December 1st, 2011

What should we be focused on as we launch our new department?

The following twenty bullet points are certainly not a complete list, but are areas that should be considered for any supply chain re-structuring including what is needed to drive success. These points should help frame your thought process and get you headed in the right direction.

1. Request CEO and CFO support.
2. Empower the Department.
3. Structure and staff the department for success. Not just one person.
4. Plan a detailed review of all contracts.
5. Plan a detailed review of all suppliers. 
6. Improve the performance of all suppliers or replace them.
7. Find a way to gain access to additional sources of supply.
8. Improve your view of all spend categories. Technology, Technology,  Technology.
9. Review any off shore and near shore sourcing.
10. Meet with all departments that controlled historical spend.
11. Review all sourcing methods being used by others today.
12. Review all Environmental strategies
13. Review all Product Safety strategies
14. Collect or create a product specification library
15. Conduct detailed category discovery session
16. Review lower cost SaaS oriented solutions that can ramp up quickly.
17. Develop and education plan.
18. Outline a plan of where you will be in 90 days, Six months and a Year.
19. Develop short and long terms goals that support your plan.
20. Build a department that delivers zero incremental cost to the organization.

As you use the above list and grow it, it is important to remember that the job of a procurement management leader is to think outside of the box and educate while looking for innovative ways to do things better, faster and at a lower cost. And to hopefully create an environment that will inspire co-workers while doing that.

We look forward to and appreciate your comments.

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