Supply Chain Digital: CPOs claim short-term goals undermine long-term value

Originally Published in Supply Chain Digital | March 31, 2013 | By Ella Copeland

This year’s Procurement & Strategic Sourcing Data Survey has revealed the majority of CPOs lack the resources to manage the procurement function.

Over half of Chief Procurement Officers (CPO) have agreed that their company pursues short-term saving from suppliers that undermine long-term value, according to a survey by the Consero Group.

The recent ‘2013 Procurement & Strategic Sourcing Data Survey’, which was compiled in partnership with Vantage Partners, revealed that the majority (65 percent) of CPOs focus on using competitive pressure to get maximum value from suppliers, rather than using collaboration to achieve the same results (35 percent).

“Chief Procurement Officers are challenged with the task of driving savings and delivering critical resources with maximum value,” said Paul Mandell, Founder & CEO of Consero. “Our survey reveals a conflict for Chief Procurement Officers, who want to obtain the best overall value, yet often rely on competitive pressure rather than collaboration. Procurement officers should communicate to senior management that pursuing unreasonable short-term savings can be destructive to long-term value.”

Pressure on CPOs

The role of the CPO is a challenging one, according to the survey results, which revealed that 45 percent of respondents feel they do not have enough resources to manage the procurement function effectively, and a significant minority (34 percent) experiencing a budget decrease.

Controversially, nearly half of surveyed participants claimed that social responsibility and sustainability were ‘not important’ or only ‘slightly important’

“These findings are indicative of economic weakness, as a significant portion of respondents say they lack sufficient resources to manage effectively, and many companies continue to put issues like sustainability and social responsibility on the back burner,” said Mandell.

About

The 2013 Chief Procurement Officer Data Survey, presented in partnership with Vantage Partners, LLC, was comprised of 16 questions that were posed to a group of Fortune 1000 Chief Procurement Officers who were in attendance at an invitation-only event hosted by Consero in January 2013. A total of 42 responses were provided.