Alignment
Aligning Suppliers: Insight from a former Mars CPO
January 15, 2018
Jordan Early
1 minute

Whenever the team at OSL talk to businesses about Supplier Collaboration and Innovation (SC&I), one key theme always comes through. The challenge of linking procurement activity directly to business objectives.

Given that businesses spend million (often billions) with their suppliers each year, I believe aligning supplier activity to business goals is the most critical step procurement functions can take on their path to delivering against organisational growth.

But after years of chasing procurement metrics, how can businesses make the pivot and start aligning more closely with organisational objectives?

Luckily for you all, In 2017 I caught up with former Mars CPO, Pat Mitchell, to discuss this very topic.

Below you’ll find my key takeaways from our webinar. But if you’d like, you can listen to our full conversation.

Takeaway 1 – This is a real problem.

Pat begins the discussion by sharing two key stats. For the first, he references Capgemini’s CPO Survey which states; “two-thirds of CPO’s today lack tight alignment between their day-to-day actions and the overall objectives of the business.”

Perhaps unsurprisingly, the second stat, taken from Hackett’s Procurement Stakeholders Survey asserts that “Just 16% of procurement organisations are viewed as valued business partners by their stakeholder.”

Cause for concern?? I think so!

Takeaway 2 – In the past, we defined our own success.

Pat states that procurement has been “good to great” at delivering on things like working capital and costs savings. He goes on to mention that we’re missing out on the business strategy side of things. “There is so much more to business strategy than cost savings and risk management,” he says. Pat closes this section with a strong assertion that cost savings are not a good enough business case for the long-term success of procurement.

Takeaway 3 – Alignment is part of our evolution.

Pat discussed the need for procurement to continually evolve and better support the business. This is magnified further by the disruptive forces that are impacting all large organisations. Pat’s statement that “the vision and strategy of the business sit at the core of procurement’s transformation” is supported by his belief that procurement should constantly be reinventing its value proposition and looking to impact top-line growth as well as a bottom line cost savings.

Takeaway 4 – Alignment requires a mindset shift.

Pat mentions throughout the discussion that business alignment needs to become the long-term focus for procurement organisations. He highlights that while new skills and competencies need to be built and developed, the vast majority of procurement teams are capable of starting to make the necessary changes today. It’s all about adjusting your perspective away from short-term metrics and towards the ongoing success of your business.

Pat is an excellent resource for the procurement community, and our conversation provides an eye into the mind of someone who has successfully navigated this ground before. I implore you all to take a listen and start your journey today. You can download our full discussion here.

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