Every dollar your company invests in what you do ends up saving the business at least three dollars — and up to eight dollars for top-shelf Procurement operations.

That sounds like a lot of pressure on you to produce the most bang for that buck.

It doesn’t have to be.

Good news: You don’t need a GPS to chart your current course.

That’s a relief, because a lot of CFOs have a long list of demands in mind these days.

With Procurement and Inventory influencing anywhere from 40% to 80% of your company’s operating costs, you can expect to find yourself high on the CFO’s “what’s important” list.

There are four areas you can focus on that’ll help make sure you stay on the “good girls and boys” side of that list.

1. Basic demands. When you get down to it, Procurement will always be — first and foremost — the process of getting what your company needs from outside sources and getting it to the right place by the right time.
   Your goal: Take the operation to the level where you can turn on a dime (and give 7 cents change). That means sourcing, ordering and expediting have a defined system and run like clockwork.
2. Trimming costs. Once you’re Procurement operations are running like clockwork, you can turn attention toward pruning a bit here and there from operational costs.
   Best areas to focus on: Develop e-sourcing tools and proficiencies, work with employees to improve their negotiating skills, and seek feedback from staffers on ways to ratchet operations down a little tighter.
3. A seat at the table. If your company expects more savings from its Procurement operation, it needs to clear a seat the big table where company-wide decisions are made.
   The more you know about the business process — and plans — the sooner you’ll get a jump on strategic planning for what Procurement needs to do to make it happen. It could be lining up new sources, or re-negotiating agreements with vendors or suppliers. The sooner you’re made a part of this process, the more options — and power — you’ll have.
   Example: If a vendor smells desperation, it’ll take advantage of you with a “gotta have it now” price. But if you approach that same vendor with time to spare, there’s always the threat to that vendor you could seek a different source if dealings aren’t to your liking.
4. Wielding your power. With a willing ear among your fellow managers and proven strength with suppliers, you’re in the position to go that next level — the one that increases Procurement’s “bang for your buck” power.
   Instead of order-and-pay relationships with suppliers, you’re in a position to collaborate. You can come up with new ideas for packaging or functionality.
   And with your seat at the table, you’ll have the support you need — at the highest levels — to make it happen.

Tags: CFO, operating cost, ordering, procurement, sourcing