Demonstrating Commercial Leadership

Across Australia and the Asia-Pacific, Procurement teams are earning a commercial leadership position, through more strategic value adding activities, focusing on influencing the key company growth levers. A series of major trends are changing organisations, and increasing the importance of effective procurement activity. As organisations compete on the basis of integrated value chains, effective Procurement is essential for delivering and sustaining competitive advantage.

The Faculty Roundtable has sponsored this research to highlight the diversity of ways that Procurement can make a contribution to organisational success. It is designed to raise awareness of the value Procurement can deliver, as well as inspire others to continue their work to assist their organisations in adapting to a changing world.  The findings outline a series of trends that are impacting on organisations which are increasing the strategic nature of Procurement activities.

The case studies discussed within are drawn from a variety of industries and a diverse range of organisations. These include some outstanding examples of Procurement teams adding value to their organisations, for example:

  • Implementing a joint venture with a key supplier to build velocity and secure Intellectual Property in an industry seeing massive growth
  • Project managing a new Distribution Hub in partnership with an outsourced distributor to cater for growth, retain market share, and build relationships with Sales and Operations.
  • Establishment of a new governance framework that enabled six indirect procurement projects to be conducted, resulting in an average 30% cost reduction.
  • Using demand management and supplier negotiation to reduce travel costs by 50%.

As these trends continue to impact organisations, Procurement teams are adding value by leveraging multiple commercial levers – Risk, top line growth, cost savings, efficiency and commercial innovation. These elements are critical for Procurement teams to identify and deliver value.  Several common ingredients have also been identified an expanded on such as executive sponsorship, stakeholder engagement and innovation focus to enable success.

Organisations that have invested in developing their Procurement teams and who are focusing on continuing performance improvement are reaping the rewards. As the importance of external supply chain partners continues to increase, Procurement teams will need to further respond and deliver in order to continue the process of Demonstrating Commercial Leadership.

The Demonstrating Commercial Leadership report contains the full analysis, benchmarking, conclusions and recommendations cited above. To request the full report, please email The Faculty.