A major output of the strategy development process is a set of functional strategic objectives, including procurement strategy objectives. As procurement managers interact with other members within their business, as well as with corporate executives, a major set of strategic directives should begin to emerge.
These strategic objectives may or may not provide details concerning how they are to be achieved. Unless procurement executives can effectively translate broad-level objectives into specific procurement goals, these strategies will never be realized. Procurement must couple each objective with a specific goal that it can measure and act upon. These specific goals become the initial step for a detailed commodity strategy formulation process. Remember, objectives drive goals, whether at the highest levels of an organization or the department level.
The next level of detail requires translating company-wide procurement goals into specific commodity-level goals. Although it is not always the case, companies often use commodity teams to develop purchasing strategies. Purchasing strategies often apply to commodities (general categories or families of purchased items).
In case you have not yet discovered it, developing an integrated procurement strategy is a whole lot of work! The requirements to deploy a strategy that is effective and can capture competitive advantage rest on a critical element: people. Procurement decisions will only succeed if they are (a) based on multiple insights from key people in the field, as well as critical secondary sources, and (b) communicated to decision makers in a form that is useful, resulting in actions that are directly tied to the insights gleaned from the information.
The next level of detail requires translating company-wide procurement goals into specific commodity-level goals. Although it is not always the case, companies often use commodity teams to develop purchasing strategies. Purchasing strategies often apply to commodities (general categories or families of purchased items).
In case you have not yet discovered it, developing an integrated procurement strategy is a whole lot of work! The requirements to deploy a strategy that is effective and can capture competitive advantage rest on a critical element: people. Procurement decisions will only succeed if they are (a) based on multiple insights from key people in the field, as well as critical secondary sources, and (b) communicated to decision makers in a form that is useful, resulting in actions that are directly tied to the insights gleaned from the information.
