Executive Insight: Making Procurement Strategic in an SME

This story is based on a real case from a mid-sized Finnish company that operates globally and manages a complex supply chain. The company had grown rapidly, and procurement had primarily focused on fulfilling the operational needs of production. What were steps in making procurement strategic?

1. Recognize the Opportunity

The executive responsible for the supply chain had long been reflecting on procurement's role—issues with delivery reliability, price fluctuations, and fragmented supplier collaboration. They saw an opportunity: "What if we had a dedicated person responsible for procurement—a procurement lead—who could develop the function, strengthen supplier collaboration, consolidate our buying power, and build a practical procurement strategy?"

They brought the idea to the executive team. This sparked a shift in thinking: even as an SME, procurement should be led systematically.

2. Start with People

The company decided to recruit a procurement lead whose role was to unify procurement, increase visibility, and develop ways of working. They chose someone with procurement experience and strong business understanding.

The new lead began by listening—meeting with business unit leaders, buyers, and teams to build a complete picture: how procurement was currently done, who the suppliers were, what contracts existed, what the key challenges were, and what people across the organization hoped for.

3. Build on Data

One of the first actions was to consolidate purchasing data from different sources. The goal was to build shared visibility: what was being purchased, from whom, how much, and at what price. Visualizing the data helped the entire organization gain a unified perspective.

At the same time, the first procurement improvement plan was created—not a heavy strategy, but concrete, early-stage development actions: improving internal collaboration, launching category management, consolidating purchases, and enhancing collaboration with key suppliers.

4. Start Simple

Initial efforts focused on a few impactful actions that could be implemented quickly and deliver immediate value. For example, launching category management, improving collaboration among international buyers, and refining ordering processes led to rapid savings and made daily work easier.

5. Communicate Results

Within the first year, tangible results were achieved: more clarity in operations, better cost transparency, efficiency and value for the business. These results were actively communicated throughout the organization and turned into a story that made procurement’s value visible.

6. Embed the New Mindset

More important than any single result was the shift in mindset. Procurement came to be seen as a way to ensure continuity, manage risk, drive sustainability, and improve profitability. It was no longer just a reactive purchasing process, but an integrated part of business. The work initiated by the supply chain executive had truly taken flight.

Making Procurement Strategic: Six Practical Tips

1. Recognize the opportunity: Procurement in SMEs can be a lever—not just a cost.

2. Start with people: The right procurement lead connects people, insight, and execution.

3. Build on data: Data and analysis create shared understanding and direction.

4. Start simple: The first steps can be small but impactful.

5. Communicate results: Make the outcomes visible across the organization.

6. Embed the mindset: When procurement is part of the conversation, it's part of the business.

I’ve written over 140 blog posts about procurement development, its role, and its potential. If you found this story helpful, I encourage you to explore more—each post shares lessons, experiences, and practical insights from various industries and situations.

If you’d like to discuss how procurement could be developed in your organization, feel free to book a time directly in my calendar:

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