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2nd reminder letter for payment for Procurement

[Music] here chief executives congratulations yesterday's earnings call has been received much better than the previous one revenues up from last quarter and the lists appear to be happy with profit margins roughly at industry benchmarks unfavorable comparisons to industry peers have been dropped for now as you reflect during your morning run here are a couple of thoughts on how to change the narrative for good the analysts did have half a point last time yes you have posted presents in core markets through a smart combination of organic growth and M&A you have launched an exciting new product line and you have substantially decreased exposure to high labor costs you've also reacted appropriately to the pandemic but so have your competitors striving to stay one step ahead of them is a good thing of course but this more of the same will make every earnings call vom that could go as well as this one or one that goes as poorly as the previous one you deserve to become the industry benchmark how about doubling the financial operational and strategic benefits from procurement and doing this every year you and your industry peers are consistently overlooking procurement it controls roughly half of your cost it largely determines quality it eighths the speed of your operations it could be a major source of innovation in this pandemic it could bring it down with yet unknown risks in your supply chain it has the potential to fund your journey to industry leadership it should inform or even shape your strategy yet you treat it like an administrative function that hardly features in your saying and never gets mentioned in earnings course if you took a closer look you would encounter a transactional culture content with delivering the usual two to four percent of annual savings and ensuring continuity of operations getting more a lot more is possible but it will take a more enlightened effort and just roughing up your procurement people business as usual may even get you less out of procurement it penetrated from globalization like no other function with politicians around the world busy pulling up proper riches and bringing critical production back home globalization is taking a rest factor cost are on the rise everywhere and import duties are in vogue again the analysts are probably not going to have Leo over shrinking profit margins that are hitting the entire industry and you will be able to flame at verse macroeconomic trends but there's a better way that will allow you to break away from the pack you should embrace procurement make it a top priority in the courtroom have it reach across the value chain and influence conversations with customers harness its insights and relationships and the chief and lasting competitive advantage are you nearing chief executives have gone there before follow the example they have charted a journey you will shape it to your specific situation of course but broadly speaking the journey will have three main legs first you will agree on a joint master plan with the chief executives of your key suppliers this plan will outline how the operations and the direction of your suppliers build improved with your help it will outline how we aspire deeper relationships with fewer suppliers it will shatter monopolies pain abling challenges it will a strong incentive to crow to the capable and willing the plan will also describe a future in which you and the capable and willing suppliers will jointly reshape industry segments with breakthrough product architectures second even needs to give a broader mandate to procurement invite it to shape your agenda it will increase your agility across the product life cycle it will challenged establish thinking in other functions adding the best cost quality speed innovation and the lowest risk out of suppliers requires a different way picturing procurement is the mirror image of marketing and sales in strategic decision making is a good way to get started if this broader mandate cert you will make procurement a place to be for skilled and ambitious people technology is finally ready to freedom from transactional tasks empower them to do a lot more of strategic syncing and execution bringing fresh talent where needed make it a showcase for digitization it is a great place to start because compared to other functions the team size is relatively small and the data quality generally good do you want to take the legs in this or in a different sequence or do you want to take them in parallel what type of financial operational and strategic benefits would excite you toppling everything every year will be good hypothesis sovereign savings upper body double speed double innovation half the risk double strategic impact year-over-year for the next three to five years paired with your elephants this should raise spirits internally and bet the appetite of shareholders and analysts alike extra guards Christian you