Let’s be honest: What role does procurement play in your company? For most of you, the answer will be clear. “They are cost drivers. They negotiate with suppliers, bargain percentages and guard contracts.” In many companies, procurement has for decades played a subordinate role with traditional tasks. And this is still the case today, even though we live in a completely different time, at least since Corona.
Today, economic, environmental, legal, and political challenges are putting massive pressure on global supply chain networks and making them vulnerable. The result is delays, failures, and rising costs. To remain competitive, business leaders are being forced to take steps to make their networks more robust and resilient. This includes transforming procurement.
It is high time to rethink procurement and give it a new role in the organization. If strategically positioned correctly, this area can become a powerful lever for business success by consistently optimizing procurement costs.Jürg Hodel
Co-Managing Director Staufen.Inova
Strategic procurement realignment needed
“Procurement is often a closed community within a company, not understood by other departments. In its traditional role, procurement has now become a challenge in the network,” says Jürg Hodel, Co-Managing Director of Staufen.Inova. This is also confirmed by one of our studies: Six out of ten companies see the greatest need for action in optimizing procurement, parts availability, and delivery times. “It is high time to rethink procurement and give it a new role in the organization. If strategically positioned correctly, this area can become a powerful lever for business success by consistently optimizing procurement costs,” says Hodel.
The first step is to create an understanding in all areas of the company that procurement today must assume the role of a service provider in the company. Only then can it reach its full potential. Management must give the starting signal for this transformation. After that, it is important to create transparency. This means that all departments must work together to find an answer to the question of who is currently purchasing what, where, how, and in what quantities. Based on this, cost saving and efficiency improvement opportunities can be identified and tasks can be developed. Staufen accompanies and supports the methods, procedures, and organization of this change process.
* Staufen Inova / May 2022 – SCNM made in Switzerland Si reserach: THE BUSINESS COSTS OF SUPPLY CHAIN DISRUPTION US & Europe,
Procurement as a service provider within the company
The goal of the transformation is to create a central platform within the company. From there, buyers act as facilitators, building bridges to the external network of suppliers. At the same time, they act as internal partners: “Internally, their task is to bundle similar procurement needs and create optimal conditions to reduce the workload of specialist departments,” says Jürg Hodel.
In its new role as a service provider within the company, procurement can contribute to the company’s success by
- remaining consistently focused on total cost of ownership (TCO),
- being agile and flexible to meet product, customer, and market demands,
- continually positioning the company along the value chain,
- being service-oriented,
- continually evolving across functions,
- implicitly implementing sustainability and corporate social responsibility,
- involving and integrating suppliers, and
- maintaining active contract and risk management.
Jürg Hodel sums it up: “In short, this transformation moves procurement from a niche to the heart of the company. The Staufen approach has already proven itself in various industries, as the following examples show:
Dr. Peter Schüpbach
CEO, Ivers-Lee AG
As a provider of packaging services to the pharmaceutical industry, we have traditionally been driven by external factors in our procurement activities. Today, procurement is professionally structured within a framework that is acceptable to us. For our customers, we are often the benchmark for TCO and agility.
former Head of Product Supply Management, Wander AG
Conducting an assessment in procurement made the fields of action more transparent. We were able to quickly address key levers, particularly in indirect areas. Thanks to the holistic approach, we now have a professional and mature procurement organization.
CEO, Haag-Streit Group
With the support of Staufen.Inova, we have achieved transparency of all expenses with the Spend Cube. Through the gradual introduction of commodity group management with lead buyers, the entire Group now benefits from professional procurement.