Traditional Procurement organizations have become very good at delivering cost reductions. Data Analytics, Automation and Cognitive sourcing have allowed us to continue delivering on that expectation year after year. However, by focusing only on cost reductions we are missing the most significant opportunities to improve our organizations bottom line and to enable growth! Majority of the life-time costs of a Product is determined during design but traditionally, Procurement has spent little time in that phase. Standardization, feature set analysis, co-designs, market feedback are just a few opportunities that can improve not only the bottom line but also the total solution Value. We cannot cost reduce ourselves into growth. Modern organizations are focusing on Design for Value!
- Traditional Procurement needs to evolve
- Lifetime Costs of a SKU are determined early in the product lifecyle
- There is significant difference between "want" and "need" features - Procurement must help to create value