The title for this post was inspired by an article on LinkedIn quoting Fabian Ziegler, the CPO for Shell, who said “Procurement is a relationship business.”
Of course this holds true for both Sales and Procurement. Unfortunately there is often too much focus on price and we quickly forget about our relationship objectives.
A key theme for us at Coalface Dialogue is building stronger relationships between Sales and Procurement. It takes two to tango, and the fault does not entirely fall with procurement.
Recently when I was working in Dubai the sales people were complaining that their counterparts in procurement were overly focused on price. Yet, when the negotiation started, the sales people led with price. The mindset of the sales people created a self-fulfilling prophecy.
This is quite common, and it takes hard work to overcome, as highlighted by these quotes for the same article:
“The relationships developed by procurement are based on the value created by linking suppliers to the company’s strategy. This requires knowing both your business and your suppliers very well, and that is the hard part.”Jean-Yves Rotte-Geoffroy – CPO GlaxoSmithKline
“Relentlessly pursue strong relationships and they will pay long term dividends.” Gene Tabor – Former GM Purchasing, Toyota