The 21st Century Procurement Department

What Is A 21st Century Procurement Department?
characteristics of "The 21st Century ProcurementDepartment."
Structure & Alignment
Modern procurement departments structure themselves to achievethe perfect mix of centralized and decentralized buying. Endusers - not procurement - place orders for low-dollar items,using contracts set up by a centralized procurement staff. Sotransactions are decentralized, not decisions.
A centralized procurement staff is concerned not with order placement, but with establishing enterprise-wide contracts,managing relationships with those suppliers, and providing processes for decentralized transactions.
There is no one-size-fits-all way of aligning a procurementdepartment. Some organizations align their procurement staff according to customer. Others align according to commodity.Still others align by supplier. The "best" way depends on the goals of the company.
Qualifications, Knowledge, & Skills
Because of the higher-level responsibilities of modern purchasers, they must have solid fundamental procurement capabilities, analytical skills (particularly in financial analysis), advanced computer expertise, and skills incontracts, project management, relationship building, strategy development, and negotiation.
The manager needs to have all of the skills of his/heremployees plus the ability to:
* Align the procurement department with the mission and vision of the overall organization
* Implement initiatives and best practices that support the mission and vision of the overall organization
* Lead people and the procurement function in general
Software & Intangibles
Modern organizations are adopting or "growing into" spend management technology solutions which blend eProcurement,reverse auction, spend analysis, and other capabilities. As far as intangibles, they focus on delivering measurable results aligned with organizational objectives andcollaborating with suppliers to achieve a competitive advantage.
In addition, procurement departments are enlarging their role in the supply chain. Once simply just the interface forexternal "inputs," procurement departments are now also expanding towards the organization’s "outputs." This involves managing inventory, taking responsibility for logistics, and,in the future, even being a more significant part of a customer collaboration team.