Novartis' global head of productivity strategy believes the procurement function has become a victim of its own success. While systematically driving cost savings "to impressive results," procurement pros may have built a box around themselves.
Sammy Rashed blogs that execs have become "addicted" to the incremental cost savings delivered courtesy of the procurement office, and they are now unable to imagine any larger role for the function in business success. Undeterred, Rashed has set out from his operational management role with a cohort from finance to "assemble the blueprint for generating...greater productivity" for Novartis while also finding the next horizon for the procurement function. He hopes to move procurement from an agent for growing the bottom line to a force that increases overall operating income.
He promises reports throughout his quest but offers some initial findings. One possibility, he writes, is to improve the demand management process by "combining with such productivity enablers as process reengineering (Six Sigma), allowing the procurement office to work from greater insights than those provided by the traditional method of challenging user requirements and consumption.
Another early finding: Industry leaders have begun offering integrated end-to-end services solutions. In them, he sees dual benefits of streamlining non-customer-facing processes while offering procurement "a potential career path to [a] board-level position."
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