How to Build a Procurement Function from Scratch

Reading Time: 22 min 07 sec

Introduction

Congratulations! You’ve just been asked to stand up a new Procurement function.

To set yourself up for success when creating your Procurement function, my key message is simple: Start small.

Why?

Procurement is by definition a support function. However much we, Procurement professionals, want to convince ourselves otherwise, you do not absolutely need a Procurement function to operate (with a few exceptions… public sector *cough* *cough*).

Sure, if you don’t have one you’re just haphazardly buying goods and services and wasting tremendous resources doing it… but my point remains true.

Therefore, a Procurement function must continuously justify its existence... This becomes easier over time, as you deliver wins and instill a “Procurement culture” in your company, but this never goes away.

Accordingly, if I were starting a Procurement department from scratch, my main focus would be justifying the existence of this new function as soon as possible. It would be about creating momentum. And, it is much easier to create momentum with a small object that grows bigger over time than to start with a big object initially…

In practice, this means delivering recognized, highly visible positive impacts to the company’s bottom-line ASAP. Yes, there are many other value levers Procurement can act on and deliver (I’ll be the first to shout this from the rooftops…). However, when you want to “make a name for yourself”, these are a secondary consideration.

With this basic premise in place, let’s dive into the tactical elements to consider when standing up your new Procurement function.

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