Executives know that talent matters in procurement. But how much does it matter? A McKinsey global survey of purchasing executives at more than 200 companies finds that those setting the pace in purchasing best practices differ from ordinary companies along three talent dimensions. Together, these dimensions are associated with nearly 60 percent of the difference between the financial performance¹ of these two classes of companies. The top-performing ones hire better people in sourcing, set clearer performance aspirations for them, and create strong sourcing cultures that encourage purchasers to align their activities with corporate strategy. The payoff? Leading companies enjoy annual cost savings from their overall sourcing efforts that are nearly six times greater than the annual savings of low performers. Moreover, the winners are positioning themselves for broader strategic gains as the pressures of globalization intensify.

The survey,² conducted together with the Supply Management Institute of the European Business School, assessed the performance of the respondents’ companies against recognized best practices in purchasing and supply management by analyzing responses along four dimensions: the capabilities and cultures of purchasing professionals and their organizations, respectively; the corporate structure and systems that support purchasing; the management techniques and business processes supporting...