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The end of the Purchasing area

The headline sounds sensational, but the fact is that Purchasing managers are increasingly looking to automate the request-to-pay (R2P) process. All routine activities, including analysis, can be roboticized, and we are seeing dramatic reductions in the number of buyers in companies, notably those who buy the materials called Indirect.


In addition to automation, there are other practices that are constantly being implemented, such as BPO (Business Process Outsourcing) and e-Prourement, a very mature tool for users to purchase through contracts periodically negotiated by Purchasing, among other practices.


Consequently, it is increasingly difficult to establish the profile of a buyer, given that this transformation is demanding professionals who differentiate themselves as category managers, carry out strategic negotiations, develop the supplier market and promote the continuous reduction of TCO - (Total Cost Of Ownership. Total Ownership).


People and Management managers can help by alerting and encouraging the migration of transactional-focused buyers, so that they become more strategic, through greater specialization in the purchases that most add value to the business, in addition to the systematic use of Performance Indicators that promote the evolution of the process.


In turn, the CPOs (Chief Procurement Officers), in addition to equipping the Supply process, need to enable the growth of professionals with goals that associate actions with results, and not with metrics that, in practice, measure nothing, such as the number of purchase orders/buyer/month.


It's been many years since making the famous three quotes have been replaced by multi-sourcing strategies (see the Procurement Chessboard, which contains 64 different negotiation levers), but even so, many companies adopt this one that has become a worst practice.


The point is that this change is happening very quickly, accelerated by the Pandemic, which has been forcing many companies to reduce their costs.


A strategic negotiator is focused on deeply understanding the cost drivers (TCO view) of what he buys, getting to know more and more with internal customers, understanding where and how the material or service he buys is used, and maintaining a Intelligence on best practices, suppliers and technical specifications.


Many companies that understood that Supplies need to be inserted in the business value chain, thus not being a support area, started to significantly improve their financial margins.


Thus, the shopping area, as it is today, has its days numbered, but the buying process, on the contrary, has been highly valued. It is up to professionals working in this area to understand the signs that these changes are inevitable, being just a matter of time.


Rogério Toledo is a consulting partner at DGB Consultores, writer and columnist for Gente Mais Portal.

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