Today’s chief procurement officers (CPOs) must deal with just-in-time supply chains, ever-evolving tariffs, new sourcing regulations, currency fluctuations, outsourcing, sudden commodities scarcities, synthetic insurance hedges, and much more. McKinsey procurement professionals Peter Spiller, Nicolas Reinecke, Drew Ungerman and Henrique Teixeira discuss the major challenges that CPOs and their organizations face, and detail the best practices to deal with them. In addition to their own experience, the authors base their recommendations on 2,000 interview hours with CPOs and top procurement executives, upward of 1,500 global procurement studies and the close examination of more than 700 procurement organizations. Despite the container loads of insider jargon, getAbstract recommends this exceptional best-practices procurement guide to CEOs, COOs and, of course, CPOs and to all the members of their departments.
Tap the Baton: Procurement as Orchestra Director
In today’s volatile business environment, the procurement function, headed by the chief procurement officer (CPO), plays a vital and increasingly responsible role inside the modern corporation. Procurement must employ up-to-date and dynamic sourcing, quickly exploit emerging market opportunities, and cut value-chain costs by optimizing supply chains. Procurement must manage a network – often global – of vendors and suppliers that can quickly become inoperative due to rapid shifts in business.
Procurement also must deal with a growing body of regulations concerning safety, environmental rules and other standards, as well as the demands of consumers and external stakeholders. Procurement must be dynamic and ready to realign its operations and activities with little notice.
This department often serves as an orchestra director, coordinating and optimizing all of a company’s external footprints so they work together efficiently. The way procurement handles spending with external suppliers can result in a competitive advantage for the corporation. Intelligent procurement reduces costs, which means making more funding...
McKinsey & Company executives Peter Spiller, Nicolas Reinecke, Drew Ungerman and Henrique Teixeira are purchasing, supply management and sourcing experts.
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