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Study details procurement best practices

Report features case studies and insights from several organizations


March 27, 2012
by Purchasing b2b staff

HOUSTON: Research organization APQC has recently released a study entitled Supplier Category Management: Driving Value Through the Procurement Process, along with audit, tax and advisory services provider KPMG. According to the study, procurement has over the past decade built structured processes, generated cost savings, and expanded visibility into spend. The 97-page report identifies 14 category management best practices within four areas, including strategic implications, resource commitment and talent management, category-specific processes and tools and extending supplier relationships.

“The rate of change required of the procurement function to keep pace with business demands continues to accelerate,” said APQC project manager Erin Williams. “Our research study provides compelling insights about how organizations are transforming procurement into a function that is truly aligned with, and contributing to, bottom-line business value.” The study’s findings include identifying supply chain risk, both at the category or market level and within key suppliers, as well as talent management concerns for procurement. These best practices include:

  • implement category risk management to monitor external market risks at the market or category level;
  • do supplier risk assessments as part of the strategic sourcing process; and
  • provide opportunities for career progression and skills acquisition.

The report also features in-depth case studies from three organizations—ATMI, FMC Technologies, Inc, and Merck. APQC said the organizations demonstrate meaningful alignment between procurement and business structure, with each procurement function earning its status as a true partner.

“While the procurement technology market has exploded with offerings over the past decade and most mature procurement organizations have built solid processes and enabling technology, human capital has actually become a scarce and valued resource,” said Patti Muldowney, director, business effectiveness at KPMG.  “This study illustrates what procurement organizations can do to invest in the talent necessary to develop the strategic perspectives, business skills, and breadth of knowledge to be able to take that next step to becoming a true business partner.”

An executive summary and the full best practices report are available at apqc.org.