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CHAPTER 4
PROCUREMENT AS A SUPPORT AND STRATEGIC FUNCTION WITHIN COMPANIES
4.7.1 BEST PRACTICE EXAMPLES
The following examples of best practices in procurement illustrate how
procurement creates organisational value.
4.7.1.1 Integrating Marketing and Sourcing
A leading global company is applying its sourcing leadership to marketing
strategy development and execution. Specifically, a sourcing manager has been
assigned to marketing and promotion strategy teams to support their efforts when
developing contracts. Examples of areas where the marketing team requires
contract support include printing services, conventions, meetings, promotional
displays and tradeshows, marketing research services and advertising and
promotion. Sourcing involvement, for example, resulted in a reduction of
company-wide printing suppliers from 600 to five.
The sourcing professional adds value to the marketing and promotion process
in a number of areas. The sourcing manager and her staff:
• Verify that every unit within the corporation is charged the same and best
rate from suppliers.
• Attend marketing and promotion strategy team meetings.
• Reserve the right to audit advertising ‘job jackets’ and costs.
• Work to gain most favoured customer status with media suppliers.
• Control the process of buying advertising and media support.
• Maintain confidentiality through control of the buying process.
• Work to retain the company’s ownership of intellectual property.
• Assume a major part of the contracting process that marketing simply does
not want.
4.7.1.2 Co-locating with Internal Supply Chain Members.
The direct involvement of the operations and technical groups within marketing
has become a critical objective for this global company. The corporate marketing
group is organised into four business segments. Consistent with this company’s
new market-based focus, increasing numbers of new product ideas are
originating from marketing rather than the traditional avenue of Research and
Development (R&D). Marketing is now responsible for market testing the ideas
generated by R&D.
Operations and technical representatives, who report to the vice-president of
new product delivery, are assigned to each marketing category. These individuals
act as liaisons with marketing to ensure that operations and technical voices
are represented and considered when new product ideas are generated.
Participation with marketing ensures that operations and technology groups have
early insight into new product requirements and can convey these requirements
back to their functional groups.