Procurement Report: Procurement × Management：「3 points to Earns Recognition in Executive Meetings」
kenji.shinkai@global-sourcing-academy.com
At executive meetings, an enormous volume of reports is submitted from every department. However, to be honest, many procurement reports end up with a simple reaction from top management: “I see, you’re working hard.”
Why is that?
Perhaps the message is not truly resonating with executives. What moves top management is not a detailed explanation of purchasing results, but genuine participation of procurement in management.
So, in this one-minute column, here are three practical and accessible points I recommend.
1.From “Cost Reduction of XX” to “Operating Margin Improved by △△%”
Procurement departments often report, “We achieved a cost reduction of XX yen!”
Of course, this is an important accomplishment—one that usually requires significant effort.
However, what executives truly want to understand is how that initiative—your procurement KPI—has impacted management KPIs, whether positively or negatively.
- Before
“We did it! Achieved a 3% reduction in material costs!”
- Resonates with the C-suite
“We did it! Achieved a 3% reduction in material costs — which translates into a 0.7% improvement in operating margin!”
Why not clearly show where it affected the P/L? That is the first step. Simply adding this perspective can fundamentally change how procurement is evaluated.
2. Are You Explaining How “Uncertain Supply Chain Risks” Impact Revenue?
Procurement sits on the front line of the supply chain. For example, when the semiconductor shortage became a reality, many companies were significantly affected.
- Before
- “We may face a supply disruption!”
- “We currently have 1.5 months of component inventory.”
- “We will begin evaluating alternative parts starting on XX"
- Resonates with the C-suite
- “Let me show you our Supplier Map. We have visualized risk levels using green, yellow, and red indicators.”
- “In the event of a red-level supply disruption, we estimate a potential revenue decline of ¥XX billion and a profit reduction of ¥XX million.”
- “Updated progress is 70% through alternative components, distributed inventory locations, and diversified logistics routes."
Such perspective is often the turning point in how procurement is evaluated. And if you add "the remaining 30% requires collaboration from development and engineering. To secure revenue, we ask for management’s support in accelerating cross-functional cooperation.” That's positive pressure to management.
3. Turn “Procurement Strategy” into “Corporate Strategy”
Many reports focus solely on “last month’s results.” However, executive meetings are where decisions about the future are made. The detailed outcomes of price negotiations are, of course, important. But the real question is: Are you talking about strategy?
For example:
- (A) “Revising US dollar–denominated pricing in response to continued yen depreciation”
(B) “Securing the budgeted operating profit level” - (A) “Implementing a SaaS-based procurement system”
(B) “Enhancing corporate value through company-wide digital transformation (DX)” - (A) “Strengthening the development of new overseas suppliers”
(B) “Gaining competitive advantage amid market shifts driven by overseas production expansion”
These are examples where (A) a procurement strategy directly connects to (B) a corporate strategy.
４. Message
In recent years, increasing attention has been given to “Procurement and Management” perspective. The difference lies in whether you are talking about “Purchasing Matters” or “Corporate Management Matters.”
This distinction alone can dramatically change the perceived value of the procurement function.
Procurement and management consulting, advisory services
