CPOs claim short-term goals undermine long-term value
The recent ‘2013 Procurement & Strategic Sourcing Data Survey’, which was compiled in partnership with Vantage Partners, revealed that the majority (65 percent) of CPOs focus on using competitive pressure to get maximum value from suppliers, rather than using collaboration to achieve the same results (35 percent).
“Chief Procurement Officers are challenged with the task of driving savings and delivering critical resources with maximum value,” said Paul Mandell, Founder & CEO of Consero. “Our survey reveals a conflict for Chief Procurement Officers, who want to obtain the best overall value, yet often rely on competitive pressure rather than collaboration. Procurement officers should communicate to senior management that pursuing unreasonable short-term savings can be destructive to long-term value.”
Pressure on CPOs
The role of the CPO is a challenging one, according to the survey results, which revealed that 45 percent of respondents feel they do not have enough resources to manage the procurement function effectively, and a significant minority (34 percent) experiencing a budget decrease.
Controversially, nearly half of surveyed participants claimed that social responsibility and sustainability were ‘not important’ or only ‘slightly important’
“These findings are indicative of economic weakness, as a significant portion of respondents say they lack sufficient resources to manage effectively, and many companies continue to put issues like sustainability and social responsibility on the back burner,” said Mandell.
The 2013 Chief Procurement Officer Data Survey, presented in partnership with Vantage Partners, LLC, was comprised of 16 questions that were posed to a group of Fortune 1000 Chief Procurement Officers who were in attendance at an invitation-only event hosted by Consero in January 2013. A total of 42 responses were provided.
Vizibl: The Future of Supplier Relationship Management (SRM)
Even the best procurement team on the planet can only derive so much value from their suppliers by tinkering with spreadsheets or negotiating another half-percent-per-unit from a regular bulk-buy.
The value of relationships count in today’s fast-paced and disrupted business environment, where partnerships, future efficiencies and risk mitigation are just as vital a measure of an organisation’s maturing procurement organisation as overhead reduction.
A recent McKinsey survey into 100 large organisations found that the more cooperative an organisation, the more financially competitive it could become. "Companies with advanced supplier-collaboration capabilities tend to outperform their peers,” it found, but also admitted that this value is not a simple thing to access.
Visibl is a company built from the ground up with the philosophy of ‘delivering mutual value' in mind. Its digital procurement platform is designed to place collaboration at the centre of supplier relationships. Greater transparency for all stakeholders not only simplifies and quantifies contractual obligations, but also provides opportunities to discover and align on common goals and business objectives.
How does Vizibl’s platform work?
Vizibl’s supplier relationship management platform feeds off data. By leveraging data from existing enterprise applications such as ERP, P2P, risk management, or project management systems, all stakeholders can share a central source of truth. The result is greater transparency, visibility and accountability on both sides of a contract. The platform is divided into several focus areas:
- Vizibl Relationships: This system helps organisations move beyond transactional interactions with their suppliers, instead building trust and applying a governance framework that is both scalable and consistent to better support core business objectives.
- Vizibl Workspace: Operating in one virtual workspace removes friction in collaborative endeavours and aligned initiatives. Vizibl Workspace enables partners to drive goals together, whether improved cost-savings, ESG commitments, new product launches or boosting operational efficiency.
- Vizibl Reporting: Measuring results is critical in achieving business objectives, forward planning and risk management. This system helps business leaders leverage actionable data to quantify and drive initiatives, support and mange supplier performance, and understand true ROI.
Key Vizibl customers: Heineken, Vodafone, Astellas
“Gartner lists supplier collaboration as supply chain leaders’ number one focus to solve for agility and resilience”
Speaking to SupplyChainDigital.com earlier this year in June, Mark Perera, CEO and co-founder of Vizibl said: “We work with companies across multiple industries, but regardless of sector, we really see agility and resilience as overarching topic areas in the supply chain. From a resilience perspective, that’s both in terms of operational resilience, but also strategic resilience; we see organisations looking at implementing the desired levels of flexibility and the ability to change with demand, as they look towards the future of their company.”
“Gartner lists supplier collaboration as supply chain leaders’ number one focus to solve for agility and resilience,” he added. “The mindset and process change to switch to a supplier collaboration model will be a challenge for organisations that are falling behind.”