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Figure 13: WHICH OF THE FOLLOWING FUNCTION(S) OR DEPARTMENT(S) DOES PROCUREMENT AND SUPPLY CHAIN WORK CLOSELY WITH ON A REGULAR BASIS?
Finance Warehouse / Logistics
87.7%
76.4%
Production Sales
50.9%
50%
Legal
44.3%
IT
42.5%
Marketing Internal audit Research and Development (R&D)
38.7%
31.1%
27.4%
Customer service
21.7%
Other Risk management Human resources
19.8%
9.4%
4.7%
70% 80%
0
10%
20% 30% 40% 50%
60%
90%
Why does procurement need to connect with other internal functions? Well, production is the main customer of procurement for direct material supplies; sales provides insights on the end customer experience; legal supports contracting with third parties; IT is typically a big-spending function; marketing creates the future demand for products and services; internal audit can support in monitoring compliance with procurement governance; R&D provides insights into upcoming business requirements; customer service provides end users’ feedback; human resources can assist in developing a career path for procurement (as well as being a budget holder); while the risk function can play a vital part in managing potential threats in the supply chain. A successful, value-adding procurement department therefore needs to engage and build effective working relationships with multiple stakeholders. In all but the most authoritarian, command-and-control organisations, it has to develop a customer-centric culture and become adept at selling and marketing its own services.
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