Procurement: Should you avoid them?
“Opportunity arises for the prepared mind.”
Procurement departments are perceived as only being focused on reducing prices, so many suppliers will avoid procurement where they can. Instead focusing their energy on building relationships and providing value for business unit contacts. So, suppliers only deal with procurement when they are forced to.
In the past this has been a successful strategy, especially in industries where business units have had more influence than procurement on buying decisions. However most industries are becoming more sophisticated in their buying strategies and so the growing influence of procurement is becoming a bigger issue for account teams.
Within your top accounts there are specific skills and strategies required to effectively manage relationships, both with an accounts procurement team and with their business unit contacts. Those companies who continue to avoid procurement will discover the increased influence of procurement the hard way: when they suddenly lose their business to another supplier.
As businesses make tough decisions to survive, procurement are now driving more of the buying process. If procurement are not aware of the value that you provide as a supplier then they will choose the next supplier purely on lowest unit price.
Procurement’s job is to reduce costs and manage risk. However, the smartest procurement teams are also looking to create greater business value.
So to grow your top accounts you need to understand the role of procurement and manage your relationship with them as well as with the individual business units. Make sure that procurement fully understand the value you bring and frame your messages to show how you can reduce costs, mitigate risks and build business value for your account.
This is how procurement see you:
So, prevent procurement seeing you as just a commodity supplier:
1. Be relevant to your customers
2. Supply more value than your competitors
3. Improve your customers business results