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Procurement Strategy – Organizational Structure

Once the internal and external scanning of the procurement environment has been completed, planner/buyers or buyers can then turn to mapping the capabilities of the procurement organization to support the business plan. The objective of this step is to provide procurement and operations management personnel with a clear analysis of how well the capabilities of the procurement organization will be able to support the business’s strategies.

Map Procurement’s Organizational Structure

This activity will detail the degree of procurement centralization, the organizational matrix in which task responsibilities are assigned and actions performed, how authority is delegated, the level of strategic influence procurement has in the business, and the structure of communication flows within the procurement organization and between procurement and other business functions.

Map Employee Capabilities

This activity will validate the qualifications of company procurement professionals to execute the procurement strategy. Missing skills should be identified, and a training and certification program formulated to remedy knowledge gaps.

Map Procurement Departmental Practices

The goal of this activity is to reveal the content of such work elements as the sophistication of existing procurement controls and technologies used in order management; procurement’s capability to perform strategic sourcing and value-add buyer activities; use of technology tools such as e-business and EDI; use of P-cards and supplier contracts; and use of statistics to record and analyze supplier performance.

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