BY DAVID PENNINO
Sourcing and procurement might not be the most glamorous profession ”” just ask the parents of my four daughters”™ classmates as we struggle to make small talk at countless school events. At this point, I”™ve received enough uncomfortable reactions ”” glazed tedium, embarrassed confusion, a sudden inability to meet my gaze ”” to last a lifetime. True, it”™s not exactly “test pilot,” “fireman” or “DEA undercover operative,” but strategic sourcing and complex supply chain and procurement are actually very interesting, often undervalued and increasingly play an important role in any business. Companies that optimize their sourcing and procurement gain a competitive advantage, an edge that is becoming clearer to boardrooms and executives around the world.
In the simplest terms, my job is straightforward: I buy things for companies. Or, rather, I help them to do it on their own using a combination of domain, industry and process expertise alongside an ability to apply targeted solutions and world-class technology that is based on individual needs, so they have more spend leverage and smarter processes. I can even take over the function completely if they want.
Sourcing and procurement specialists can show businesses how to spend and leverage in a way their CFOs can only dream of ”” because we buy for many companies across many industries. Sourcing and procurement gives companies speed and transparency in their supplier relationships. The goal is to empower these companies to link their business processes from concept development to customer delivery.
Sourcing and procurement is on the cusp of the next wave of business evolution and it”™s coming right on time. Less than 20 years ago, the vast majority of companies didn”™t even have chief technology officers. Technology wasn”™t considered a competitive advantage. Fast forward to today: Name one successful corporation that disregards technology. Companies that embraced technology early were able to completely revolutionize their businesses and remain relevant in a rapidly changing environment. Today”™s chief procurement officers or heads of sourcing and supply chain are becoming as prevalent and as vital in the preservation and the performance of a company”™s bottom line as chief technical officers.
Farsighted C-suites and boardrooms see this wave coming, understanding that sourcing and procurement hve the potential to cut through layers of bureaucracy, clutter and inefficiencies in order to drive business growth. The economic turmoil of the past two decades means that even the “coolest” companies are compelled to find ways to operate more efficiently and effectively. No one is exempt. Companies that take advantage of the opportunity to optimize their spend operations now will be best positioned for success in the years ahead, creating new foundations that enable creative savings to permanently accrue, rather than erode and fade with time.
So when business leaders start looking at their investments and asking what they can do to ensure sustainable and measurable profit and cash enhancement, it”™s the sourcing and procurement experts who”™ll be on speed dial. Those drivers of operational efficiency and value creation who help companies buy smarter hold the key to a more profitable future for businesses of all shapes and sizes. Pretty glamorous, no?
David Pennino is president and CEO of Norwalk-based LogicSource, a sourcing and procurement services firm owned by Bain Capital.
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