Knowledge as an asset: Driving value and managing risks

Knowledge as an asset for Procurement

How procurement organizations should leverage internal expertise for supplier relations.

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Excerpts from Fredrick Spalcke:

Procurement organizations can build or buy their knowledge assets

There are different ways to get transparency on the facts.  So one is, you have people who have been in the industry for a long time, who naturally move from company to company, maybe from industry to industry, so they get different angles on the same topic, best practices, so that means you can get knowledge by getting the right people, and that is one very important thing.  Secondly, you can buy a lot of high end research that gives you good ideas what to look for.  Then you have the news channels, and you have conventions, you also have people who are very engaged in the industry who get their fingers on the pulse, so that’s one way of getting the facts straight.  Then you need a good analytical head to look at, what are the priorities, what are the priority drivers that will change the business?  So that is very entrepreneurial.  So you need clever people who can do that.

Procurement organizations can leverage internal expertise for supplier analysis

Now there’s another thing that you can think about, so if you’re buying a finished good, for example, so an ODM product, now that product may be made out of PCBAs, there may be some chips inside, there may be plastics, etc, now what you can do is, you can analyze it based on your plastic experts.  So you may have finished good ODM buyers in your company, but you may also have people who buy PCBAs and chips and plastics.  So now you can take those commodity management peers, you can take them to analyze your ODM suppliers because they have plastics and they have PCBAs and they have electronics in there.  So that means sometimes, by looking across commodities for their competence, you can actually do a very good second and third tier supplier analysis.

Retention of people is key to protecting knowledge

You have a big problem with intellectual property rights, because also in procurement, what do you do, for example, if you had a commodity buyer who knows all your prices, all your supplier strategies, and then comes along another job offer, you get €10,000 more, and the guy just switches company with all the information you have.  This other company, maybe they had a gap like this, now the gap is closed.  Instantly, you closed the gap because you have the knowledge of the prices.  You need to know exactly what type of people you’re hiring so you keep them happy, and they don’t leave.


Driving value and managing risks

  • Have the right people
  • Buy the right research, get the right facts
  • Analyze the information
  • Utilize your internal commodity management knowledge base
  • Combine cost leadership with innovation leadership

About Fredrick Spalcke, Philips

Fredrick Spalcke is the Executive Vice President and Chief Procurement Officer of Royal Philips. Before joining Philips, in 2012, Mr. Spalcke worked for several multinational companies in executive leadership roles, building a successful international career with a strong track record of restructuring and delivering results, based on a broad experience in Corporate Strategy, M&A, Logistics and Procurement.

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