To find out, we conducted a survey with close to 200 procurement executives, in Asia and in Europe. We found pretty conclusively that procurement managers are their own worst enemy, both with external suppliers and within the company, with internal customers and other stakeholders.
Let’s begin with supplier relationships. Nearly half our respondents claim they spend time with suppliers asking them for updates on the markets and new business suggestions. This is not great, perhaps, but it certainly sounds encouraging.
Poke a little deeper, though, and you’ll find the picture looks less rosy. As the chart below shows, only about a third of managers are actually bringing any supplier intelligence into their organizations by advocating for suppliers and facilitating new connections for them, which is what you would expect someone managing the supply chain to do. Just 20% claim to be communicating business insights shared by those customers; only 17% could even tell us in what segment their supplier put their company. No wonder suppliers don’t want to spend time with these folks.
Let’s turn to what’s going on inside the company. As the second graphic shows, many procurement managers are trying to demonstrate internally that they have strategic value. They’re gathering intelligence systematically about the company’s stakeholders and communicating their successes. But it isn’t getting much further than that. Less than 30% of the time do we see procurement managers customizing value propositions for internal customers and stakeholders, tracking satisfaction levels and setting targets for satisfaction.
If this sample is representative, then we can hardly be surprised if many c-suiters think that procurement is a backwater. And we can hardly expect young high-flyers in most industries to see it as a career path of choice.
Looking ahead, procurement managers will have to change the way they approach suppliers and business peers; being a strategic business partner means so much more than negotiating a discount.