A CPO has many responsibilities — but at the end of the day, the job is all about logistics.
A CPO (Chief Procurement Officer) is the sort of acronym that sounds similar to other three-letter executive-level titles. Yet unlike a CEO, COO or CTO, the CPO handles something very specialized: logistics. This being said, the definition of a CPO’s job may sound quite broad. This position, which reports to the CEO, oversees procurement as it relates to purchasing supplies, sourcing materials, acquiring equipment, and essentially handling supplying and shipping relations.
As such, this role is all about the supply chain. In an era when the supply chain is constantly evolving and subject to both unexpected risks and thrilling innovations, that role is more important than ever.
A CPO’s day-to-day operations may include monitoring and auditing a logistics budget, handling contract negotiations with steps along the supply chain, and heading up an internal team while navigating and cultivating relationships with external suppliers.
Due to the dynamic and demanding responsibilities CPOs must take on, there are essential things that individuals in this role should know about logistics. From the often-confusing language of contracts to using data and analytics to drive down logistics spend, creating better workflows, and finding the best solutions to move forward with confidence, here’s what every CPO should know about logistics.
In this article, we will discuss:
The value of embracing technology
Contract negotiation
Vendor relationships
The power of innovation
How Resource Logistics Group can help
The value of embracing technology
The best logistics solutions are driven by technology. A transportation management system (TMS) can help CPOs automate processes and harness data to make decisions and streamline the supply chain. The logistics industry no longer runs on analog. Today, it is all about digital systems that transform transportation data into tangible information while negating — or at least reducing — the need to waste manpower on data entry. A TMS helps eliminate errors and can even use machine learning to mitigate supply chain risks and identify trends.
Contract negotiation
One important — and admittedly daunting — aspect of the supply chain process for CPOs, lower-level employees, and even logistics experts, is contract negotiation and auditing. Vendor contracts should not be considered complete once signed; they must be revisited and renegotiated as the competitive market becomes ever-more saturated. A CPO should approach a logistics contract with several things in mind, including identifying opaque terminology, questioning scalability, determining ROI as it relates to service levels, and, of course, whether the rates are aligned with value.
Vendor relationships
A vendor relationship is about more than contract negotiation. It is about having clear expectations for communication, a plan for handling expected and unexpected pain points along the supply chain, integrated technology, and an option to seek services elsewhere if any of the above (or any other agreements) do not work out as planned. A CPO’s role in vendor relationships is very important. It is a human relationship that thrives on open communication, a dose of camaraderie, and compromise. It is also a business relationship driven by clearly executed contract terms and constant review from the internal logistics team.
The power of innovation
While the word “innovation” can seem frustratingly vague, it is a CPO’s job to embody that idea. Few executive suite roles require as much innovation as the CPO. Innovation can mean adapting to and seeking out new technology for automation, analytics, and a more seamless supply chain. But innovation is bigger than technology in logistics. It also means having the ability to embrace new partnerships, see the long-term goals of the company, and implement the team and the techniques to be increasingly forward-thinking.
How Resource Logistics Group can help
As CPOs continue to innovate and work towards big-picture plans, it can be helpful to partner with a team of logistics experts. Resource Logistics Group exists as trusted advocates dedicating to saving our clients money by analyzing transpiration rates, translating dense contract language, advising on bid management, offering a TMS platform, auditing freight and more.
Resource Logistics Group does all of this while allowing our clients to stay in control of their logistics operations. We act as trusted advisors — not micromanagers. Whether your company operates locally, globally, or is rapidly scaling, contact Resource Logistics Group for a free benchmarking analysis and to plan your next steps in the world of logistics.