For those working in the supply side profession, the perceived performance difference between these roles can be enormous. Is this because we are fixated by titles and getting recognized? Probably.

Titles aside, the challenge within any organization is articulating your value add. Where organizations are inclusive, and there is an understood benefit for a particular role, titles become less important. The team normalizes effort and then starts to synergize performance.

In those organizations where the functions are less mature, and or management is less experienced with best practices, there is a need to establish and build a function brand / reputation to underscore your targeted value add. There is a broad spectrum of skill set expertise / emphasis which requires us to position and differentiate roles. To confuse further, organizational roles titles may be interchanged which blurs the understanding around the role deliverable emphasis.

Key supply side function roles

Buyer: This role traditionally supports and generates the PR/PO transaction. This administrative role is important but tends to be overshadowed by the more strategic elements involved in supplier selection, negotiation, contracting and management (buying process). Check out a couple of Buyer job descriptions. Getting a super star that delivers the strategic elements as well as attending to the administration detail is rare. Individuals tend to have either strategic or transaction skill biases.

Purchasing: This role incorporates the strategic elements of the buying process, however there is more emphasis on compliance and governance activities. A common complaint about the purchasing process is that it seems to be arranged to hinder business, is risk adverse, and too focused on price rather cost. Together with a tendency to be reactive, ticking boxes rather than adding value can be an easy trap for less developed purchasing functions.

Procurement: This role includes all of the purchasing elements, and is typically targeted to add value and improve total cost of ownership. Procurement is much more strategic than Purchasing, and better aligned to organizational goals. Moving from a reactive to proactive approach is a key enabler for the function to deliver value. There is a much more emphasis on relationships. The downside is that the long game requires more effort and time investment. The upside is that business benefits are much greater (see my article x10 Impact).

The supply side source, contract, purchase and pay cycle is common throughout all the roles; but depending on how you position the function, the emphasis changes. For those within the supply side function, procurement positioning is generally preferred because of its strategic nature. This is not to suggest that the emphasis associated with the other roles is less important. Many larger organizations separate out the roles within the overall function to help manage the different elements of the value chain. Super stars are difficult to find, and harder to scale when you expand the function.

Operating Model

An operating model is the way an organization does its work, and considers the structure, roles and collection of processes it uses to perform the work. Depending on the supply side function capability and aspiration to build its brand/reputation, an appropriate operating model needs to be developed. Starting with the basic role building blocks and moving up the value stack is a journey and a valid strategy. Note: matching capabilities with the operating model is a continual balancing act. Change management is required.

For those organizations with the supply side function already positioned at the strategic procurement level, I wonder if the operating model is truly aligned with the targeted brand/reputation – Is it where you want it to be? We know there is always room for improvement and alternative ideas and strategies exist.

To conclude, titles and positioning statements are a matter of matching and marketing the function. The reality is that customers value what they value! The real test is whether you have the capability to deliver that value.

What’s your value add? Have thoughts. Please share. Contact Us.