Procurement in 21st Century in the Chemical, Pharmaceutical and Healthcare Industry

Procurement in 21st century in the chemical, pharmaceutical and healthcare industry

This purpose of this study was to answer some of the critical questions related to procurement in the chemical, pharmaceutical and healthcare industries. This study tries to find answers to questions:

* Has Procurement the right setup within the context of further globalization, profound crises and technological development?

* Where are future potentials?

* What are best practices in procurement?

* Which trends shape procurement in future?

Methodology

This study used a questionnaire with 187 questions. Procurement in 21st was analyzed based on different topics regarding:

1. Impact of financial crisis

2. Procurement strategy

3. Process and organization

4. Procurement controlling

5. Supplier management

6. Benchmarking

Around 800 executives from 62 countries across globe participated in the study. Companies from chemical, pharmaceutical and healthcare industries are representing 13% of the participants in the study. Another objective of the methodology was to design a cross industry framework for procurement and to set a proper basis for further research in the field of procurement.

Results

Impact of financial crisis

A crisis is good for procurement due to decrease in prices. Companies should focus on crisis to reap maximum short term potential. For companies in Chemical, Pharmaceutical and Healthcare industry, it is difficult to achieve additional short term potentials in procurement. In the study, only 28% of the companies use a professional tendering management to exploit the short term benefit of the crisis.

There is no significant difference between companies from in Chemical, Pharmaceutical and Healthcare industry to the other industries. Two third of respondents stated that there will be increase in sustainability material but only half of these companies are willing to pay surcharge.

There is a relation between procurement performance and industry to which company belongs. A very good procurement performance can be found in those sectors where procurement accounts for high percentage of total cost. The success of companies in these sectors closely aligned with the performance of procurement function.

Organization

Reporting line

Organization of procurement under CEO is most commonly used model in in Chemical, Pharmaceutical and Healthcare industry with 63%. However in other industries CPO reports to COO.