Procurement

Procurement must find answers to the most important economic and geopolitical questions of the coming years. Hardly any other corporate function has changed as dramatically in recent years as procurement. Today, its remit covers a wide range of issues, including reducing external expenditure, optimising working capital and ensuring security of supply in increasingly scarce, price-volatile and unstable raw material markets& 

As a result, procurement now plays a key role in determining how resilient business models are to market changes. Costs, delivery capability, sustainability requirements and data quality all converge directly and comprehensively within procurement. A high-performing procurement organisation therefore combines strategic management with operational excellence and creates transparency regarding expenditure, risks and value contributions.

We do not view procurement as a support function, but as a core business discipline that must contribute to significantly increasing the company’s long-term performance and value. As a function, it is an essential component of corporate management, actively managing external expenditure, stabilising margins, reducing capital tied up in inventory and enabling the early identification of dependencies within the supply chain. The procurement function thus not only delivers short-term cost savings but also strengthens the company’s resilience.

Clear priorities are key here. Which product groups offer realistic savings? Where do risks arise from single sources, volatile raw materials or unclear contract terms? Which steps in the procurement process tie up capacity without creating genuine added value? KPMG analyses these questions in relation to spend data, organisation, processes, governance and the supplier base.

However, the KPMG study “Future of Procurement” also clearly shows that, in future, procurement will be increasingly shaped by technology, collaboration and new role profiles. For companies, this means that procurement must plan more strategically, make decisions more quickly and consistently implement changes into the operational procurement process.

Many procurement functions have experienced teams, but operate with inconsistent processes, fragmented data or unclear interfaces with business units. As a result, cost savings often fall short of their potential. A modern procurement organisation needs a clear target operating model, defined responsibilities and a procurement process that makes performance measurable.

KPMG supports the further development of organisational structures and operational processes within procurement. This includes role models, product group strategies, governance structures, competency profiles and decision-making pathways. It is crucial that the organisation is not merely redefined in formal terms. It must function effectively in day-to-day operations and manage the procurement process in a transparent manner, from the initial request for requirements right through to the placement of an order.

Data forms the basis for this. Spending transparency, supplier classification, contract information and key performance indicators help to prioritise measures and make successes transparent. KPMG combines specialist procurement expertise with methodological implementation experience and a technological perspective.

Savings are rarely achieved through individual measures alone. Reliable results require a holistic view of product groups, demand behaviour, specifications, supplier markets and contract terms. KPMG works with you to develop programmes that identify potential, evaluate measures and embed results within the procurement process.

The focus includes, amongst other things, strategic sourcing, supplier negotiations, demand management, contract lifecycle management and process automation. Collaboration with specialist departments, such as Finance or Legal, is also a key factor for success. 

Technology can significantly accelerate the procurement process. Digital procurement platforms featuring AI agents, automation, analytics and intake & orchestration tools help the procurement function to efficiently implement the defined processes within the organisation and lay the foundations for automated, effective collaboration with internal and external stakeholders. These applications also help to create transparency, ensure compliance and improve the quality of decision-making. KPMG helps to assess suitable solutions from a technical perspective, prepare processes and provide structured support for their implementation and the associated transformation.

KPMG regards procurement as a central component of operational performance. That is why our advisory services do not end with strategy. We support you from analysis through to the target state and implementation, ensuring that savings are measurable, responsibilities are clear and the procurement process is sustainable.

You can rely on our KPMG approach, which combines financial targets, organisational development, technology and supplier management. In this way, procurement makes a significant contribution to business performance and resilience within the organisation.  Our experts are therefore happy to support you with any procurement-related issues.