Procurement Leadership Workshop: Addressing the Need for a New Stakeholder Influence Model

Some of the typical complaints I hear from procurement colleagues are the same ones I heard 20 years ago, and it seems as if nothing has changed.

“Procurement doesn’t get any respect!  I can’t get people in the business to listen to what I want to propose to them, and they don’t show up to my category meetings.”

“Engineering, IT, and Marketing will set up a relationship and commit to a  single supplier, and then turn them over to me to get the “contract signed”.  I have no leverage to negotiate anything with the supplier because they already know they have the deal.”

“I always get people coming to our acquisition office at the end of the quarter to spend all their remaining budget, and I don’t have time to do any proper research prior to negotiating a good deal in this environment.” 

There is a root cause for these problems:  the lack of internal stakeholder relationships.  As one executive noted, “80% of supply management involves internal alignment and relationship management, and has nothing to do with external relationships.”

Procurement organizations having these problems need to change their perspective, and move towards an influence model where they can come to stakeholders with solid business options, that occur months before the need occurs.

My colleague Ian George and I are launching a unique procurement leadership program that addresses this shortfall, on the NC State campus, on May 13 – 15, 2019.  This is a unique opportunity for individuals to really learn more about themselves, and understand what they can do to become more effective in their role of change agents for driving supply chain value.

One of the major changes that has occurred in the procurement and supply chain world is a  shift in governance over buyer and seller relationships, which are now comprised by multiple stakeholders. There is increased recognition that individuals are no longer the sole decision-makers in making procure, but that multiple stakeholders may play a role.  Supply management executives themselves recognize that they cannot operate through a single voice of procurement, but must establish relational performance objectives that go beyond simple lower price savings and reflect the multiple voices of multiple stakeholders.  The field of supply management once had a love affair with the notion of strategic sourcing, which often sought quick price reductions through volume leveraging, to the exclusion of the most important party in the supply chain:  the internal customer. As this shift has occurred, procurement organizations have moved more towards a team-based approach to supply management, one in which procurement is no longer the sole decision-maker, but acts as a facilitator to lead a team-based decision.  (This shift is also documented in our paper developed in a workshop that we held in 2017 of chief procurement officers and business development executives).  As one Chief Procurement Officer we interviewed from the oil and gas industry emphasized how procurement has changed in response to this shift:

Procurement has always been simply a set of tools on a tool belt, but the real wave of change underway involves having procurement people understand the business well enough to apply the tools that will drive the most effective model for each of the operating groups and geographies in the business. Purchasing wants to create nice matrices to segment our suppliers, rather than generating and delivering a coherent strategy that defines how we work with suppliers to meet our internal business needs.”

The movement towards tighter integration in supply chains will likely increase the dependence of buyers on suppliers, which will make management of these relationships more complicated for sellers in a multi-stakeholder world.  No longer is it acceptable to only work with the local business representative.  The new face of procurement recognizes a new set of value drivers that go beyond cost savings:  understanding internal customer requirements, and codifying these requirements into a coherent statement of need that can be understood by the external supply market.

In this workshop, participants will learn how to develop an influence model that starts with establishing a business case for change.  We will prepare a customized supply chain maturity assessment, allowing participants to assess how well their organization’s procurement function is operating relative to industry competitors.  Based on this, we will then proceed through a series of cases, working exercises, and market intelligence studies to help each candidate understand the issues they are facing in their unique category and market setting.  Each participant will also have an opportunity to make their “pitch”, and receive specific feedback and suggestions for how they can improve their influence and business case for change.  We will have a group of senior executives on hand to critique and provide this feedback.

Interested? Sign up now!  Download the brochure at the bottom of the page and contact Troy Pinkins, director, at <tjpinkin@ncsu.edu>.

This will be a unique experience, and spaces are limited.