Five-Year Strategic Plan Guide for Purchasing and Supply Management

By Dr. Tom DePaoli

Over 95% of purchasing or supply management organizations do not have a long-term strategic plan. This is not surprising given the dynamic and hectic pace of purchasing organizations. Many of the plans that are completed are done once, and put in a three ring binder or a hard drive to never be referenced again.

These plans do require a lot of effort and support from top management to become useful and meaningful. They are essential to keeping purchasing on track and focused on the most important supply chain improvement efforts. Long-term plans serve as a great focal point for purchasing and ensure that constant firefighting and other upsets do not overwhelm their efforts. They can serve as guides for the stages of organizational transformation that a purchasing department wants to achieve, and reveal to non-purchasing personnel, purchasing’s long-range direction.

First off, create a vision and mission statement that aligns with the organization’s vision and mission statement. Be bold and make sure people realize that you are aiming for supply management not traditional bureaucratic purchasing. Try to gain a broad consensus and gather input from surveys, one-on-one meetings, research and as many employees, suppliers and customers as possible.

There are limitations to this guide. I am certain that I have missed some areas but I have tried to be as comprehensive as possible. Use this document as a guide and checklist not a dogmatic methodology. It is extremely difficult to predict the future as technology and the macro environment are rapidly changing. Global events can radically alter the supply chain and require new innovative strategies. Collaboration is the norm now, but collaboration can also be cyclical and have peaks and valleys of cooperation. People are the strength of an organization and any strategic plan that does not focus on people development is woefully inadequate. Many companies also have to cope with dealing with multi-generational group differences.

New products can require new supply chain tactics and alter your product mix landscape. Competitive pressures can often dictate rapid responses and major changes in product marketing and sourcing. Communication is becoming even more critical in this rapid paced world. The selling or marketing of the strategic plan is even more crucial.

Once in place, a strategic plan is much easier to update, review and fine tune.  It is important to keep it dynamic, up to date and a living document.  I hope this guide motivates the reader to take the journey of completing a strategic plan. Good luck in the journey!