The Crime of disconnected procurement organizations.

September 14th, 2022

Do you know your company's numbers?

 

 

Today’s post are the ramblings of a frustrated CEO, Ronald D. Southard, at SafeSourcing Inc

Do you know your company’s numbers? Is your plan the same as your company’s plan?

Often when I meet with procurement knowledge workers regardless of company structure, so buyers, category managers, purchasing department manager etc. and ask these two questions, the answer I get is often baffling. I have heard all manner of responses that center around the following. My numbers are based on my categories and do not really have anything to do with the companies’ total numbers which our department does not have a view of. So, I forget about asking questions about Gross Margin, and Net Earnings because this team lead is focused on his/her personal and or department numbers and their own pay plan.

I guess if I assume that every category manager is set up with their own P&L (they should be) and they all beat their plan that theoretically the companies cost of goods should go down and gross margins go up. However, that’s not happening corporately as projects never happen in a straight line. Award of Business and time to contract are often disconnected by months. As a result, all the best efforts of the procurement team may result in team bonuses even though company results do not improve as much as they should do timing that erodes the contract value in year over year results. Let us just stick with this example and not even get into expense management which does not impact gross margin. Capital Plans are another issue all together but equally requiring the focus of Procurement knowledge workers. More on that crime at another time.

At SafeSourcing we know how to mitigate these issues and assist in the alignment that is focused on reducing costs and improving earnings for all company stakeholders.

SafeSourcing is a Procure to Pay SaaS based provider of a number of e-Procurement solutions and associated with our best practices focused white glove services that are part of our SaaS offered SafeSourceIt™ eSourcing suite. These include but are not limited to SafeContract™, SafePO™, SafeDocument™ and our SafeSourceIt™ Global Supplier Database that includes over 557,000 vendor/suppliers. To learn more, please contact a SafeSourcing customer services associate.

 

 

 

If you thought this page is useful to your friend, use this form to send.
Friend Email
Enter your message

Comments are closed.