Certainly, SLCM is a sophisticated procurement management technique, which requires expertise, experience, tools and the ability to have good ideas and develop them into actual change. On the other hand, many problems SLCM makes visible and the solutions it may provide for these problems are typical management tasks involving data analyses, communication with people, acquiring new tools and processes and rationalizing others. A pattern that we see, though, is that small companies typically staff too little resources on SLCM, whereas large companies spread the tasks of SLCM on too many shoulders.
When ambitious procurement managers in small/medium companies strive for a more strategic procurement approach by spending time on SLCM they are often limited by available resources – quantity wise and quality wise. A bad but logical consequence is that these companies truncate SLCM to an absolute minimum and then „cram“ it into the purchase-to-pay or source-to-contract process. This does not only put additional rationalization pressure onto SLCM but also compromises the underlying purchase-to-pay process and produces delays and failures. By this means a vicious cycle starts which leads to ever more reduction of SLCM activities and an ever worse reputation of strategic procurement, overall. Small companies often struggle to see the value in strategic procurement at all or misinterpret it as an act of mere „administration“. Thus, today, a typical procurement strategy for a small/medium company in fact needs to foster strategic elements and consequently facilitate operational efficiency gains and up-skilling of their staff.
On the other side of the spectrum, in large companies many highly specialized departments or functions, e.g. called „procurement excellence“, „supplier development“, „corporate risk management“, „master data management“, „procurement engineering“ etc., or more traditionally, IT, Legal, Controlling all do SLCM tasks. This fact typically leads to double work, non-value-adding-activities and the loss of an integrated view on the whole SLCM cycle which is necessary to make the right decisions like: investments in the right tools, management of the whole supplier base and actual transparency gains on the whole process.
A beneficial procurement strategy needs to strive for a consolidation and harmonization of activities and effective cooperation models for all these players who typically have different backgrounds (technical, law, business) and may even sit in different countries or legal entities.