Martina, what exactly is The Procurement Initiative and why do we need it?

The Procurement Initiative is a modern think tank and a platform for people who want to shape the future of Procurement. We live in a world where uncertainty and crises are the new normal. And that is exactly why we believe in a new purpose of Procurement: to take full responsibility for creating and orchestrating global supply chains in which the needs for sustainable businesses, for a prospering society, and for a healthy planet are balanced. 

We want to inspire decision-makers and other professionals and take them on a journey to drive the necessary transformation in Procurement. Why Procurement? Well, first of all, the largest part of a company’s cost is managed by Procurement and that gives leverage; secondly, Procurement as the spider in the web connects all internal and external stakeholders; thirdly, Procurement secures a company’s output and revenues – and profit. And with those responsibilities Procurement has a huge impact on establishing a sustainable business and increasing the value of the company. 

What does this future look like?

I am deeply convinced that Procurement must take on more responsibility and should no longer make decisions mainly based on price. In the long run, such decisions are not beneficial for the company. Whoever uses the same price-driven strategy will later face endless problems in the supply chain. Something goes fundamentally wrong when you neglect such important issues as sustainability and resilience in the supply chain. 

Why do so many decision-makers in Procurement focus primarily on short-term savings potential?

So-called “quick savings” and short-term price reductions are like a sweet drug. Management and shareholders often have expectations that a certain amount of savings must be achieved by Procurement. Three percent, four percent, every year again. Of course, the suppliers know about that practice and consider it in their pricing strategy. Spending time and resources for such short-lived and unsustainable success, takes away energy and neglects the real challenging topics we face in the world.

Why is it important for Procurement to act socially responsible?

Because Procurement is the place where the big budgets reside, and big decisions are being taken – and money talks. 

Procurement is about multi-million-dollar awards, and with this power, you can make a difference. When I put the topic of sustainability on an equal footing with costs, you suddenly get the right attention of the reduction of greenhouse gases. Or of fighting human rights violations in the supply chain. Paying attention to such criteria is the responsibility of Procurement and companies in general – and a huge opportunity, too.

Do companies benefit from social and environmental doing good?

Absolutely. A company that does not position itself sustainably will not survive in the long run. There is pressure in society to which politicians react with laws, for example with the Supply Chain Act. And of course, there is a rethinking among customers. Today, they show more responsibility and demand the same from the companies where they spend their money. Today, investors also act according to ESG criteria. The faster a company adapts to this, the greater its competitive advantage.

An important part of The Procurement Initiative is the Institute for Supply Chain Management at the University of St.Gallen. What does the cooperation look like?

With the institute and Professor Erik Hofmann at the helm, we develop answers to the most pressing challenges and will also offer practical solutions. In other words, scientifically substantiated findings and solutions that bring something concrete to those Procurement professionals in charge. It's about resilience and sustainability and how to create a higher value contribution. A special focus is on a modern understanding of leadership.

What needs to change in terms of leadership understanding?

A lot of! A major topic is offering employees a safe space in which they can develop ideas and offer creative solutions. Leaders need to work as coaches, inspiring their teams, and removing obstacles from their path. This also makes Procurement much more attractive to current and new talent. The work in Procurement is demanding and stressful due to the daily changing conditions in a global supply chain. As long as production lines are running, nobody cares how a Procurement team orchestrates those global networks on a daily basis. But as soon as a truck doesn't reach a plant on time, there is a huge outcry. Recognition and empathy are also part of a modern understanding of leadership.

How can one find more information and insights of The Procurement Initiative?

Regular publications on the website and on professional networks will be available on individual focus topics. Of course, it is also about practical applications. This is why we are working with a group of currently about 20 inspiring CPOs to draw the picture of the future and how to get there.

You seem to partner up with others, what other collaborations are there?

We work together with other Procurement associations and Procurement-oriented organizations. There are regular surveys of practitioners. And we get fresh impetus from experts from other areas, for example on the subject of decarbonization. The view from the outside is important to us.

Is The Procurement Initiative open to further collaboration?

Of course. We are active across industries and countries and are inviting others to contribute to this journey. The more people participate, the more it becomes a real movement that promotes new, positive thinking.

Martina, you yourself have worked in the automotive business function for decades. What was your personal motivation to start The Procurement Initiative?

After 30 years, life on the volcano was enough (laughs). Mainly, I wanted to pass on my knowledge and experience – now in the form of advising and consulting. And I am firmly convinced that something must change dramatically in Procurement organizations and also in the management boards. We need real collaboration and sustainable solutions. 

Where do you see The Procurement Initiative in five years?

Our vision is that The Procurement Initiative will be the go to place for all questions around Procurement – for practitioners, media, and politics. And all this on a European level. An inspiring sounding board for Procurement. And a community that helps each other.