EXECUTIVE SUMMARY While the origins of the Greek economic crisis can be traced back several decades, it has been the past couple of years that have really seen Greece bearing the full force of a recessionary storm. Organisations have been massively affected by the economic and sociological impacts of the crisis and have the choice of either seeking strategies and remedies or facing an uncertain future. Procurement and supply chain management practices, when appropriately implemented, can deliver results that go directly to the top and bottom lines, mitigate risks and help to build the basis for sustainable investment and growth.
delivered by procurement and supply chain functions. This was reported as the second biggest challenge by respondents after lack of budget. Organisations appear to have processes in place for the operational side of purchasing, including spend authorisation and procurement-to-pay, but the development of processes in the more strategic areas of category management, contract management and risk management is lower. In risk management, in particular, organisations appear not to be sufficiently proactive. This is reflected in the fact that only one in four organisations includes risk mitigation in its function’s objectives. Lastly, organisations appreciate that results will come through people development and have highlighted people’s capabilities as their key improvement area in the future. Category Management Our survey indicates that organisations are now being more diligent in managing and controlling their third- party spend. More than nine out of 10 organisations in our survey regularly conduct an analysis of their spend, and three-quarters have put in place a programme of cost-savings initiatives. The top two initiatives are externally focused and call for either incumbent suppliers to reduce their pricing or new, less expensive, suppliers to come onboard. At the same time, however, more than half of the organisations in the survey are missing out on internal cost-saving opportunities that Spend Management could deliver through Total Cost of Ownership (TCO) analysis, better management of business requirements and demand, and addressing inefficiencies in the way categories of products or services are managed. Contracts Management is an aspect of procurement that Greek organisations appear to be relatively good at based on the results of the survey. But the feedback
State of Flux commenced an online survey and follow- up workshops in 2011, which were welcomed by over 130 organisations across 20 industry sectors. The results of this study suggest that there are pockets of good practice among Greek organisations, but equally there are a lot of both quick-win opportunities and long-term strategies that procurement and supply chain professionals have yet to fully implement.
Hard times call for hard measures. We recommend that organisations take the following steps:
· get closer to their suppliers; · tighten their risk management processes; · use contracts management to identify opportunities for cost savings or levers to mitigate risks; · measure the benefits delivered by procurement and promote them internally; · increase the use of technology to automate business processes and embrace change; and · improve the capabilities of the procurement team. Ultimately, organisations must develop plans to improve the management of third-party spend and achieve operational efficiencies. Procurement Governance The positioning of procurement and supply chain functions is reported to have been improving since the financial situation for organisations worsened as a result of diminishing revenues. Procurement has been under pressure to contribute cost savings – an objective that is formally set by nine out of 10 organisations that took part in our survey. There are difficulties in measuring the benefits
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