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Harvard Business Review

Procurement as strategy

The role of the supply manager is moving from an operational function into an integral part of the...

  • September 06, 2006
  • min read

Article

Procurement as strategy

In 2004, just days after Greece unexpectedly won the European Soccer Championship, Adidas delivered more than 145,000 Greece team jerseys across markets in Europe. Smart marketing, right? Without a doubt. But perhaps even more impressive were Adidas’s global procurement efforts: Thanks to a centralized supply chain coordinated with its country-based sales subsidiaries, the company created just-in-time product not only for the championship team but also for the other national teams as they advanced through the series. To round out the success, Adidas’s flexible supply chain strategy delivered these sales at very low risk, avoiding any significant investment in materials or finished product.

Procurement coups like this are helping to elevate supply management from an operational function to an integral part of company strategy. In fact, in a recent survey of 156 procurement executives that we conducted with our colleague Heidi Deringer, more than 90% said that their job responsibilities had expanded in the past three years. These new duties included shortening cycle times, taking the lead in product innovation, enhancing the quality of products or business outcomes, and even, as in the case of Adidas, generating incremental revenue via close collaboration with sales.

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