Published: 06 February 2024
Facing impacts of ongoing supply chain complexity and disruptions on business performance, procurement teams must shift from cost reduction to value optimization. CPOs must embed total cost of ownership principles by focusing on strategic value drivers, supplier management and talent capability.
Increasing supply chain cost and complexity, as well as economic and geopolitical instability, are significantly impacting business margins and supply continuity, making cost-cutting ineffective for meeting business performance expectations.
Total cost of ownership (TCO) is resource-intensive, requiring procurement organizations to dedicate considerable time and effort to developing strategic mindsets, stakeholder engagement and deep supplier management for strategic suppliers.
Often chief procurement officers (CPOs) feel their teams do not consistently demonstrate strategic behaviors, skills and actions. This hinders execution of strategic business-value-driven cost optimization and TCO objectives.
To embed TCO principles in their teams to successfully deliver on business performance expectations,
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