Inside Out - Executive Talks | KPMG | BE

Inside Out: Setting up the Procurement organization for success

Inside out the procurement organization

Viewing supplier relationships as an investment in time, resources and efforts.


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Excerpts from Tim Tolhurst:

Procurement can help avoid inventing products or services when the market can't meet the needs.

Raising the business awareness is the first thing, because what you don’t want to do is invent products or services which in fact immediately create a sub -optimal situation from a supply side, because you've put yourself in a situation where the markets can't meet the needs. We have a role to play there and we have been able to hard-wire the procurement organization in the whole project management process.

We need to shift from 'arms length' to 'customer of choice'

You start from a place where your company sees the supplier base very much as an 'arms length' sort of third party. Not so much the enemy, but certainly not somebody who has competencies, skills and experiences, capital and innovation that can help you win in your markets. The modern enterprises have thought about, "What is it that I'm good at? What should I focus on? And who else in the world is out there that can help me achieve the same outcome without me necessarily having to build that competence myself?" Unless you see the supplier base as a trusted organization which you can really rely upon, you are too risk adverse to really reach out to the suppliers and engage them in a meaningful way.

People must be empowered to make a difference

People are the last source of differentiation. The ability to really make a difference and differentiate, that certainly comes down to do you have the best people? But not just about the best people, do you have the people that are positioned and empowered in a way where they can really make the difference? And are they sophisticated enough and insightful enough to be able to bring, these more sophisticated, more solution based outcomes than just simply picking up the phone and ordering something and negotiating a price. How do you connect the supply base with the business in a meaningful way? How does procurement really act as an integrator between the supply side and the business? If you're not investing in your people today, if you're not picking the people that really can raise the bar and developing them and trying to get them positioned in a way where they can really make the difference then I think you are not doing the right things.

  • Raise business awareness
  • Get early involvement
  • Have closer working relationships with suppliers
  • Invest in people

About Tim Tolhurst, DSM

Tim Tolhurst has been the Chief Purchasing Officer of Royal DSM since January 2010. Tolhurst joined DSM in November 2009 from Firmenich Group, where he was Global Vice President Purchasing and Logistics. Tim is highly experienced in the area of Purchasing and has held several senior positions in this field with previous employers including Thorn EMI, Mars, SmithKline Beechamand Quest International.

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