The procurement function’s strategy should above all serve the business strategy. The primary task of procurement managers is to develop and implement a strategic procurement plan that is consistent with and contributes to the company's business plan. This business plan will contain a vision, related targets, and all the necessary resources to implement the strategy.
Context and challenges
When a procurement manager is appointed or, more often, when a company draws up its business plan, its procurement manager is required to develop or update its procurement strategy. As the main purpose of this plan is to support the company's strategy as much as possible, it should be approved by the company's "major internal customers", i.e. the members of the executive committee.
In general, a procurement strategy is set out in a formal document, which addresses the following points:
- Aim: identifying three-year targets
- Major challenges in reaching these targets (major challenges, foreseeable difficulties, etc.)
- Areas for strategic transformation (roadmap)
- Impact on the organization
- Impact on key skills
- Impact on processes and applications
Operationally speaking, this procurement strategy will ultimately feature heavily in the specific procurement policies for each of the commodities or procurement categories managed.
How can Argon Consulting help you?
Argon Consulting helps the procurement directors of large industrial or service groups to create or review their procurement strategy in a wide range of contexts:
- Reviewing the group procurement strategy in a context of strong growth and risk of shortages on the markets
- Creating a group procurement strategy when creating the corporate procurement function;
- Reviewing the procurement strategy following a merger
- Reviewing the procurement strategy following a rapid downturn in the market
- Providing support during a Chief Procurement Officer’s (CPO) first 100 days in the job
We also work with procurement officers to cascade this procurement strategy to strategic categories (commodities, production procurement, intellectual services, etc.).