Eliminating waste gives companies another avenue for reducing product costs beyond negotiating lower prices. It also can work its way through the system to make a company's products more attractive to its clients or customers.

As an example, savings often can be found by reducing packaging costs. That doesn't represent a lowered price for the actual product, but it is a reduction in the total cost of acquiring it. Additionally, thinking through packaging often can lead to reduced handling and storage costs within the company. Sometimes, such savings, or reduced expenses for customers, can be considered as part of the negotiation so that your own product can be more competitive as well, which is a potential boost to sales and revenue beyond just cost reduction.

Companies are finding that concepts like just-in-time delivery are creating opportunities to rethink how products are procured, handled and stored. In addition to reducing costs, this includes finding ways to produce products in a manner that is more sustainable globally and environmentally friendly. This is increasingly important to companies' marketing and image programs.

For instance, a product that once was shipped and stored in steel drums may not be needed in such quantities with a just-in-time bulk delivery system. If a vendor can reduce its use of steel drums, which is very energy-intensive packaging, a company's carbon footprint can shrink measurably.

Additionally, handling systems can be reconfigured to reduce the amount of handling, breaking down boxes, repackaging, storage, distribution and other steps that all require energy and expense. Integrating such plans in partnership with suppliers can pay big dividends for company profits and for a company's marketplace image.

Traditionally, procurement has been the kind of career that people get into almost by accident. As little as 10 years ago, it seems as though people found their way into procurement jobs largely because they were suited to yelling at sales people and brow-beating them for lower prices. Certainly, opportunities to study procurement — as an academic or university-level field of study – have been very limited.

This is changing. Today, research into the impact of procurement on businesses is a growing field. And procurement needs people uniquely qualified to approach the job as an integrated company function, involving such processes as purchasing, marketing, storage, distribution, production and quality control. Modern procurement professionals are far more collaborative than in the past, and they must have a well-developed sense of business processes, logistics and production. No longer is procurement just about buying products. It also involves integrating both external vendor and internal company capabilities to drive costs out of the system and create efficiencies beyond lower cost products.

A traditional way to measure procurement performance has been to see how well the procurement office has performed compared to budget. Has it beaten expectations for prices on purchased supplies? Did supplies cost less over the course of the year than had been projected in the budget?

Financial officers, however, are rightfully wary of budgets that may have exaggerated prices and created an illusion of effective buying. One step to correct that is to compare procurement prices with those of the previous year.

Beyond this, though, a company also can measure how well pricing has compared to the changes in market prices. Certainly, products are sold in varying qualities, with different packaging, with different volumes, and so on. But the basic price evolution is more or less the same. It can be useful, then, to measure the gap evolution between market prices and procurement prices. This also creates opportunities to understand when pricing has drifted in the wrong direction and to negotiate an improved price position even when the price may look good against budget or previous years.

For years, it was almost like a dirty little secret in the procurement and distribution industries that many products, in fact, were produced in sweatshops, with child labor or even slave labor. Companies often did not truly understand the status of vendors in their supply chain. But this is changing.

As companies increasingly source whole products instead of just parts – say a whole headlight for a car, rather than the parts to make a headlight – they are finding they have more direct access to manufacturers. They also are bringing in products, like a headlight, that are more likely to carry the company's brand name on it. Combined, these two facts create an imperative for procurement professionals to know suppliers' production systems and to protect the company's brand identity.

As a result, procurement processes increasingly speak to work conditions and related issues as part of the negotiation. It has had a positive impact on labor and production around the world.