Toshiba’s recent move to promote Hisao Tanaka, former manager of procurement and manufacturing, to CEO has created quite the buzz in the purchasing arena. Strategic leadership roles such as Chief Procurement Officer and Chief Supply Chain Officer are more often the roles filled by those with similar backgrounds. While this is not the first time a large technology company has gone in this direction -- Apple’s current CEO Tim Cook boasts a background in supply chain management -- it certainly has people wondering if this is the start of something new.
Supply chain and procurement roles have been traditionally viewed as tactical, but as noted by the Aberdeen Group, CFOs and other top executives are gaining a new perspective on the field. Eight years ago we saw CFOs and CPOs speak to procurement’s role moving ahead.
New dynamics stemming from the modern business model are reflected in those areas in which procurement must have “some role” and actively support the line-of-business managers. These initiatives include evaluating outsourcing make/buy decisions; improving cash flow; complying with new regulatory requirements; and managing sales, general, and administrative cost categories.
Personally, I think the following quote, from a recent statement by Hudson, really captures the struggle for top purchasing and procurement teams today,
The role of a procurement leader is to deliver and add value to the organisation by way of strong cost management, typically through smart sourcing and buying. The challenge in today’s world is to react to increasing demand for cost cutting while demonstrating long term strategic value.
The key word there is strategic. Companies are learning more that procurement teams play a major role in developing and maintaining a strategic edge. Everything from spend management and managing supplier relationships to contract visibility and regulating internal risk factors are vital to how an organization makes operational decisions. Appointing procurement professionals to the executive team shows us that companies like Apple and Toshiba understand what traits are important in a leader.
Supply chain and procurement roles have been traditionally viewed as tactical, but as noted by the Aberdeen Group, CFOs and other top executives are gaining a new perspective on the field. Eight years ago we saw CFOs and CPOs speak to procurement’s role moving ahead.
New dynamics stemming from the modern business model are reflected in those areas in which procurement must have “some role” and actively support the line-of-business managers. These initiatives include evaluating outsourcing make/buy decisions; improving cash flow; complying with new regulatory requirements; and managing sales, general, and administrative cost categories.
Personally, I think the following quote, from a recent statement by Hudson, really captures the struggle for top purchasing and procurement teams today,
The role of a procurement leader is to deliver and add value to the organisation by way of strong cost management, typically through smart sourcing and buying. The challenge in today’s world is to react to increasing demand for cost cutting while demonstrating long term strategic value.
The key word there is strategic. Companies are learning more that procurement teams play a major role in developing and maintaining a strategic edge. Everything from spend management and managing supplier relationships to contract visibility and regulating internal risk factors are vital to how an organization makes operational decisions. Appointing procurement professionals to the executive team shows us that companies like Apple and Toshiba understand what traits are important in a leader.
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