Risk Adds Another Dimension
In addition to these pressures, procurement managers must also deal with a whole new set of risks and executive focus on minimizing supply chain disruptions. The recent Mattel toy recalls provide an obvious, high profile of example of the risks. But procurement managers must somehow reduce the risk while still helping operations run increasingly lean supply chains.
As these skill sets expand and the recognition of their value becomes obvious to CEOs, more and more companies are creating the role of Chief Procurement Officer (CPO). And it’s about time, says Dave MacEachern, head of the supply chain and logistics practice at executive recruiters Spencer Stuart.
“The only thing surprising about the emergence of the CPO function is that it has taken so long for companies to embrace,” MacEachern told SCDigest. “It should be a no brainer and is very often the first step toward an end-to-end supply chain strategy. A good CPO will pay for himself in weeks in many cases.”
MacEachern also is seeing many service organizations creating the CPO office.
“There is a lot of money sitting in the indirect world of IT, travel, marketing, real estate, professional services, etc., and any savings go straight to bottom line,” he added. “I know of a $10 billion information services company that just hired the number 2 procurement executive from one of the major computer manufacturers. Just think of the impact she will have on that company short, medium and long term? It will be huge.”
CPO's often need to be well rounded supply chain executives, MacEachern noted.
“Its not all about price; it is about total landed cost, managing inventory levels, logistics, customer service, supplier quality, etc., and the CPO role is in the middle of these decisions or often making them,” he said.
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