7 Ways to Procurement Excellence

A.T. Kearney’s Assessment of Excellence in Procurement (AEP) study finds corporate procurement functions becoming a more vital, strategic corporate player.

In the past three years, 90 percent of study participants—procurement and supply management executives from more than 185 leading companies across 32 different industries—have increased procurement’s role in developing and executing business strategies. At the same time, procurement leaders are extracting more benefits and using better governance to improve performance both internally and externally.

The findings are clear: Procurement has greater stature, more influence, and a wider reach than ever before.

When the AEP Study began back in 1992, procurement was primarily a back-office function—dealing with requisitions, bidding, order placement, receiving, and placement.

Steadily, over the years, procurement has shifted resources toward activities that add value to the company, with nearly three-quarters of staff members now devoted to strategic
activities. Procurement has also moved up the organizational ladder with nearly two-thirds of procurement functions reporting to a C-level executive today.

• Strategic direction
• Value-adding processes
• Measurement, information and HR

Follow the Leaders
As part of our study, we identified 13 companies that demonstrate consistently high levels of procurement performance, and are strategic contributors to their business. How do they stand out? What makes a procurement leader?