Build a world-class global procurement organization.
While rising commodity costs and volatility in input prices are the dragons that procurement organizations are paid to slay every day, they are often fighting with one hand tied. Given that purchasing and sourcing costs often comprise upward of 50 percent of a company’s total costs, procurement organizations often do not receive the attention that is commensurate with their impact on preserving margin and a healthy bottom line. This incongruity is compounded by the fact that cost pressures drastically restrict the ability of companies to reinvest in growth, personnel, facilities and equipment to drive improved performance.
A world class procurement organization is one that uses procurement as a sustained, ongoing competitive advantage. Towards that end, an effective procurement and sourcing must have an embedded end-to end-perspective. This means building better visibility, organizational alignment, leveraging of supplier networks to affect better negotiated prices, more efficient use of materials, and ensuring that organizational roles, decision rights and incentives all work toward the goal of lowering procurement costs.
While many companies have initiated procurement and sourcing improvement programs, many fail to achieve sustained procurement savings as the result of the following, most frequent issues:
- Siloed purchasing and the lack of horizontal, enterprise-wide visibility
- Inability to leverage scale and manage supplier relationships to maximize purchasing power
- Ill-defined roles and responsibilities
- Insufficient attention to category management and category-specific procurement and sourcing strategies
- Poor contract and compliance management
At GROM, we understand that it is not enough to drive one-time savings. Key to our approach is to balance direct savings initiatives with building sustainable procurement capabilities within a company’s procurement processes, organizational structures and technology solutions. Enabling excellence in procurement is the essence of what an ERP should do. GROM leverages its nearly three-decade track record in ERP to aid corporations of various sizes by locating the as-is state of their procurement processes and organizations, building a roadmap to achieve world-class status, and delivering recommendations in short, medium, and long-term incremental goals to get you there.