Where oh where do we belong?

Age old procurement question: In what organization should MRO (i.e. not direct) procurement reside?

Most common answer you will get is “finance”. That’s a view I happen to share. I think the procurement and finance roles are two facets of the same job. One is the vehicle for payment, the other makes payment, and sticking close together bring efficiencies.

Unless it doesn’t. Unless procurement and finance fight. Which they do. Often.

The next most common answer? Operations. Operations usually means manufacturing which means direct side procurement. There is a pretty good argument to keep ALL of the corporation’s procurement function together, direct and indirect, under one roof, one strategy, one leadership.

I understand that, too. It’s just been my experience that buying stuff that doesn’t go into the product, thus driving revenue, means you get roundly ignored by the powers that be. Which can be fine, until you *really* need their help and they can’t be bothered.

Then there are the companies that value the procurement process as an essential part of their daily lives and they make an actual C-level position to govern procurement and give them their own organization, their own right. But the number of sizable companies I know that truly have a CPO can be counted on one hand.

I’m not sure I have the right answer. I’ve lived in finance, I’ve lived in a variety of ops organizations, and I’ve reported to an executive VP of procurement. All have their ups and downs.

This topic is on my mind lately since the recent purchase of my employer. We just got word we’re being reshuffled from finance over to ops. In the case of The Company, this is actually a good thing. Remember that bit above about procurement and finance fighting?

The COO here used to be the head of procurement at a former company, so he’s at least vaguely familiar with the fact that it takes different effort to buy a million piece parts versus a million dollars worth of software.

So we’re on the move again. Right now I’m just wondering if I still have a job. Maybe tomorrow I’ll worry more about the pros and cons of being an indirect sourcing person in a manufacturing world.