Procurement Intelligence Unit

There is no doubt that in times of economic downturn Procurement/Sourcing comes into its own.With reducing revenue and increasing raw-material costs comes a demand for increased margin from better/more efficient sourcing.I have not yet seen a supply chain that can not be improved by between 5 and 20% by better /more efficient procurement.The key is for the procurement function not only to find these better sources but to facilitate the smooth introduction and make it easy for the Product people to work with them.Lower cost sources are generally less sophisticated,than their predecessors,but can be successful if they are guided through the initial mine-field that is starting with a new customer.In addition it is vital that businesses review their internal processes to ensure they are buying in the most efficient ways.

Procurement needs to prosper, because all the people have some basic needs, like to eat, get dressed, a place to live and so on... when the economy is going down we need to focus on procurement at the basic needs. After that, we could change our focal point gradually and work to attend more needs of the clients.

It creates an opportunity BUT can be detrimental if incorrect products and services are treated as a commodity. Where cash is king simply reducing costs without realising the full impact will have a negative impact. 

As a service provider, I see the recession as an oportunity to take stock and plan for the future as things slow down. Because of the slow down of bookings, we have time to review our service levels, look to improve our offer, and remove the isues which hold us back. The year we have brought of Full expense management tools, and other online services which created savings for our customers. We are now growing again and functioning better, so perhaps it's not just procurement, but an oportunity for all of us.

It most certainly allows Procurement to shine, though only if they have been on top of the game throughout. In times of uncertainty all the work put into managing the supply chain and analysing and protecting against potential risk pays dividends. 
It is also affords opportunity to make savings and not just from your suppliers. People within your organisation, who in the past may have been reluctant or slow to engage in cost saving exercises often become much keener when everyone is feeling the pinch. This is especially true for those departments / spends that are furthest from the Procurement teams influence

there is plenty of evidence to suggest a slowdown, but not a double-dip - lets hope that this is the case. I would suggest that procurement is always an extremely valuable part of the supply chain (or business) processes and that the main difference is the level of focus that it achieves at such times. Lack of growth can result in procurement no longer being able to look to economies of scale to assist in negotiations, but there are plenty of other means available to good Procurement Managers which make them shine at such times. 

Kevin you are quite right of course. I've just had one of my clients pull back from an outsourced Procurement Agency because it was only another link in the cost chain. Having taken it back in house, they have utilised staff that would otherwise have been made redundant. These people are closer to the business and making some serious changes for the better. This is perhaps a silver lining in the clouds for many.