Eight questions to ask your CPO!
Nov 22, 2023 - Current market challenges may continue. Most indicators suggest that commodity pricing pressure, labor shortages, supply chain congestion, and general volatility will persist over the coming 12-18 months, if not beyond. Procurement and business leaders must continue focusing on creating value, managing risk, and increasing resiliency in an uncertain context.
To win in this new normal, it will be up to procurement not only to swiftly mitigate immediate concerns but also to focus on building sustained, advanced capabilities. The question all organizations must ask themselves is if they have or can acquire the internal organization and capabilities to maximize the value-generating potential of their procurement function.
CEOs can seek answers to several questions to assess procurement’s inflation-fighting capabilities:
1) Have you developed a comprehensive perspective on exposure to the different input costs driving inflation? How are these costs impacting your near-term targets? What is the role of noneconomic factors in your decision making?
2) Do you have deep insight into supply market dynamics, risks, and economics? How are you sharing these insights with other functions to help protect revenues and margins?
3) Have you identified and enabled the full suite of value levers to mitigate supply and cost risk via pricing, technical, demand, process, design, financial, and commercial approaches?
4) Do you have a well-designed and practiced playbook to recover and then control costs as inflationary pressures subside?
5) How are you embedding the lessons learned into sustainable processes, systems, and organizational design choices to permanently upgrade the procurement operating model for the new environment?
6) Do you have effective strategic partnerships in place to assure supply and to stay relevant?
7) Do you have a way to accelerate alternatives eg, new suppliers, new locations, new designs, new materials)?
8) Do you have the right talent and capabilities in your team?
In these unprecedented times, EPG continue to help organizations tackle their most pressing procurement and business challenges. Our procurement outsourcing service is a powerful lever in the current market environment, to ensure sustainable resilience and efficiency.
Procurement’s inflation-fighting capabilities.
