DIGITAL PROCUREMENT: THE BENEFITS GO FAR BEYOND EFFICIENCY
After months of making her case, the chief procurement officer (CPO) of a major multinational walked out of the executive team meeting with a big win—approval for a customized manufacturing process to help speed a new product to market. Her procurement team not only identified the emerging technology, it developed an innovative partnership agreement with two suppliers to codevelop it.
It all began six months earlier, when a business unit leader invited the CPO to brainstorm with his team on how to get a new product to market rapidly. The CPO knew two suppliers, one of which was breaking ground on an innovative production process for rapid prototyping and another using advanced analytics to accelerate design. She proposed codeveloping a customized manufacturing solution with the two suppliers. Procurement would orchestrate an agile team to test the process and, if successful, make the case for investing in the new technique. The business unit leader was thrilled.
Leaving the meeting, the CPO mused that five years before, she wouldn’t have even known about the suppliers’ innovations—or dared to propose that her team help develop a customized manufacturing solution. Most of procurement’s time back then was taken up with tactical activities and buying products that the business units ordered. The rapid emergence of shared data platforms and emerging technologies created an opportunity for procurement to speed innovation.
QUESTION 1 (20)
The CPO has requested you to provide a detailed report on digital procurement and why the organisation should consider moving towards this direction. Your report should define the concept and provide an evaluation.
QUESTION 2 (20)
Using evidence from secondary research, provide reasons why many multinational organisations have been slow to embracing digital technology within their procurement functions.
QUESTION 3 (20)
The CPO is preparing for an important global procurement conference which will be taking place in 2 weeks. Her presentation is entitled “A reflection on how the procurement function has transformed over the past 10 years”. In your view what are some of the issues that should be raised in the presentation? Your response should also include practical examples in substantiating the main issues raised.
QUESTION 4 (20)
Using a relevant framework critically discuss how purchasing contributes to value creation.
QUESTION 5 (20)
From a strategic and operational perspective, critically discuss the challenges affecting the procurement function. Your response should also include the sources of these challenges.