The Strategy Blueprint is a series, guiding you through the steps to developing a strong, holistic procurement strategy. Weekly publications will dive into one of the 15 modules supporting Sourcing Champion’s procurement strategy and provide insights from our procurement experts.
SP.01.Procurement Framework Strategy
Procurement Framework Strategy
At the core of our procurement strategy lies a sturdy and reliable foundation, the Procurement Framework Strategy. Like the foundation of a house, it ensures the strength and stability of the entire structure by linking our business and corporate strategies and aligning category, supplier, and process strategies. This coordinated approach creates a seamless flow that supports our entire procurement strategy process, giving us the foundation, we need to succeed.
A resilient foundation, ensures that every aspect of the procurement strategy, from strategic ambitions to measurable deliverables, is aligned with the company’s overall goals.
Laying the Foundation
The Procurement Framework is the first of five strategic partitions that make up the 15M blueprint. Within it there are four modules that occur in sequence. The Procurement Framework applies the existing corporate & business strategies to the procurement mission and vision. Thus creating a resilient foundation, ensuring that every aspect of the procurement strategy, from strategic ambitions to measurable deliverables, is aligned with the company’s overall goals.
First, the procurement framework strategy is developed, defining, and substantiating strategic directions using tools such Value Contribution Targets (Module 1). Targets must be comprehensive and measurable, including risk, sustainability, growth, cost, and quality. Defining such objectives establishes an agile framework structure, allowing category supplier and process strategies to simultaneously lean on, strengthen each other.
Next, just as an architect considers the values and goals of a building’s inhabitants when designing it, businesses must consider their own values and goals when creating a procurement framework. A Strategic Analysis (Module 3) of a company’s values, strategies, and goals will determine how an aligned procurement strategy may be leveraged as a competitive advantage.
A well-designed framework strategy must also be engineered to withstand the dynamic changes of the procurement world. Guidelines (Module 2) and Strategic Direction (Module 4) must be implemented with a long-term, sustainable, vision. Due to the solid nature of a strong foundation, future opportunities that align with corporate & business strategies need to be accounted for from the very start. As follows, a resilient foundation is also accessible even through internal or external changes.
In conclusion, a strong procurement framework strategy is essential for any successful business. It provides the foundation upon which the procurement strategy is built, ensuring that every aspect of the procurement strategy is aligned with the company’s overall goals. By designing a solid and agile framework, businesses can position themselves for long-term success in an ever-changing business environment, much like a well-built structure that withstands the test of time.
Stay tuned for next week’s issue, we’ll be exploring Category Strategies, the second strategic partition of our 15M architecture.
Get insights on how to systematically analyze & coordinate all key strategy parameters.