How to Empower Your Chief Procurement Officer
2020 has been a year like no other in recent history, and the US manufacturing industry has felt the impact. Declines in production, forced shutdowns and inconsistent value chain behavior during the ‘peak’ of the pandemic will likely drive industry behavior for years to come. In what could become a permanent change for the industry, most manufacturing leaders are reevaluating the role of their workforce. One way to enhance digital capabilities in the workforce is to develop an ecosystem comprised of today’s top manufacturing talent (like your Chief Procurement Officer, or CPO) built on the back of a world-class Customer Relationship Management system.
There are a few common themes we are seeing more and more in the manufacturing world nowadays. The need for agility and accuracy in data management, customer centricity and the ability to make data-driven decisions seems to have taken over and remodeled company cultures. Furthermore, this need has pushed boundaries of traditional roles and job functions, requiring people to think outside of the box more often, especially at the management and senior leadership group level.
What I would like to emphasize and focus on here, is how organizational success – understanding your customer’s needs, wants and challenges – can empower a Chief Procurement Officer in today’s manufacturing market landscape.
Empowering Your Chief Procurement Officer
CPOs must focus on the traditional quality control metrics and services – all within budget. It's no wonder CPOs are starting to play a more strategic role than ever! Instead of being brought in after business decisions have been made and tasked with implementing them cost-effectively, the CPO has become a strategic business adviser and an integral member of the senior leadership team. To gain that deeper understanding of customers, CPOs must rely more on technology and platforms that centralize such information.
A robust CRM platform can provide greater visibility into a company’s customers, in real-time – from order history, strategic account pricing and customer agreements, to their browsing history, favorite items, potential new interests and reactions to marketing campaigns, coupons and promotions. All of this powerful information centralized and combined with inventory insights, some forecasting and maybe a little AI prediction can enable a CPO to proactively investigate systematic procurement and supply chain improvements by locating new suppliers, sourcing new materials, negotiating lower prices and even asking suppliers to cut margins.
Additionally, it is highly important that CPOs have visibility into consolidated customer issue data, whether those are regarding defective products and services, shipping delays or incidents. Understanding when an issue arises, how often, and how many customers are being affected can provide deeper insights and help a CPO come up with a solution and potentially a new strategy. It may turn out to be a supplier issue, or a material issue or maybe the supply chain management strategy overall. Although the majority of these issues often require reactive behavior in terms of solving for the actual problem, acting as quickly as possible and trying to identify the root cause to prevent recurring incidents can do magic with customer retention and customer loyalty.
The year ahead will vary for manufacturers depending on where they have felt the greatest impact from the pandemic. For some, 2021 could require reimagining supply networks to serve market demand, while others might focus on rebuilding lost revenue streams and more effectively engaging partner and customer networks. Regardless, visibility and the ability to collaborate across all lines of manufacturing business will give CPOs and broader management the ability to make meaningful, data-driven decisions that will maximize both bottom- and top-line performance.
We know that customer centricity can make or break a business’s future. Partner with FMT and we'll collaborate with you. We can discuss how to best set up your Chief Procurement Officer for a stellar 2021. And we can explore how we have successfully connected front- and back-end systems to enhance sales, operations, marketing and service departments to weather the ever-changing landscape of being a manufacturing organization post-pandemic and beyond.