Achieving supply chain excellence utilizing a more strategic approach to purchasing.

For too long, procurement has been forced to play a supporting role. Given today's need for major cost efficiencies, a growing number of companies have elevated the procurement function, approached it strategically and given it the charter and technology to achieve huge economies.

Implementing a more strategic procurement initiative has become critical for companies. The issue is no longer whether to do it but how. The practices of leading companies clearly show how to build a strategic procurement function that can play a major role in driving supply chain excellence.

Leaders of strategic procurement are far better at creating effective purchasing strategies, sourcing and category management as well as managing suppliers.

To create and maintain strategic procurement initiatives that achieve major project cost savings and supply chain efficiencies, research shows companies must:

Take a strategic look at procurement and give it the mandate to establish and enforce compliance. Millions of dollars in cost savings are possible when companies have one procurement organization that can enforce what suppliers the company uses fairly and impartially.

Companies must aknowledge the efficiencies of division of labor, doing so allows third-party procurement operations to utilize it's focused skills to improve quality, costs and time.

Look over the horizon at key supply categories. Strategic category planning which includes supplier segmentation and automated supplier performance assessment is critical for anticipating supply stability and finding the right product at the right cost at the right time.

Use technology to make purchasing highly efficient, totally transparent and compliant. Online portals that automate RFQ's, RFP's and RFI's, technology that tracks supplier performance and material innovation tools that bring procurement professionals up to speed on new products are all critical to supply chain excellence.