Building a Procurement Department from Scratch at a Transportation Company

Building a Procurement Department from Scratch at a Transportation Company

Establishing a procurement function from the ground up in a $1.5B company is no small feat—especially in a transportation industry where margins are tight and operational efficiency is paramount. As Procurement Manager at a transportation company from 2019 to 2021, I took on this challenge, creating a department that delivered 6% spend reduction in its first year while driving process standardization and compliance. By developing processes, KPIs, and dashboards, I transformed a fragmented purchasing landscape into a cohesive, value-driven operation. Here’s how I did it—and the lessons I’ve carried forward as a procurement leader.

The Challenge: A Fragmented Procurement Landscape

When I joined the transportation company, it was transitioning from a private entity to a publicly traded company—a shift that demanded greater accountability and efficiency. Yet, the organization lacked a formal procurement or sourcing function. Corporate buyers handled truck and trailer maintenance parts, while each of the 16 service centers independently managed MRO, PPE, tools, and other purchases. This decentralized approach led to rogue spend, lack of visibility, deconsolidated supply bases, and unleveraged spend. Leadership’s goal was clear: standardize processes, ensure compliance, reduce costs, consolidate SKUs, and streamline the supply base. My task was to build a procurement department that could deliver on these objectives while supporting the company’s growth.

Laying the Foundation: Process Creation and Standardization

The first step was to establish a robust framework for procurement operations. I developed a comprehensive set of processes, including approval levels, supplier selection criteria, scorecard evaluations, contract templates, purchase order workflows, and RFP/RFQ/RFI templates. Beyond these, I created a vendor onboarding process with detailed documentation and a procurement playbook to guide the team and stakeholders. These tools ensured consistency and transparency in how we engaged suppliers and managed spend.

To make these processes scalable for a $1.5B company, I prioritized standardization across departments. This meant training the entire organization—Maintenance, Site Operations, Finance, Facilities Management, and more—to understand the role of sourcing and the new processes. Through workshops and presentations, I educated teams on how procurement could add value without slowing operations, ensuring buy-in and alignment. This foundation was critical for creating a department that could grow with the company while maintaining efficiency and compliance.

Measuring Success: KPIs and Dashboards

A procurement department is only as effective as its ability to measure and drive results, so I established clear KPIs to track performance. These included cost savings per category and overall company spend, on-time delivery, contract compliance rate, supplier quality scores, and procurement cycle time. To monitor these metrics, I built custom Excel dashboards, pulling data from the company’s Oracle-based system and presenting it through PowerPoint templates for leadership reporting.

The dashboards were instrumental in driving accountability. For example, I tracked on-time delivery across critical categories like truck maintenance parts. When the dashboard revealed a 15% drop in performance from a key supplier, I used this insight to initiate a performance review, renegotiate terms, and ultimately improve delivery reliability by 20%. This data-driven approach ensured the team stayed focused on measurable outcomes, delivering tangible value to the organization.

Overcoming Resistance: Training and Stakeholder Buy-In

Securing stakeholder buy-in was one of the biggest challenges. Departments like Maintenance and Site Operations felt procurement was “stealing their authority,” slowing decision-making, and creating more work by requiring scopes of work and scorecard evaluations for strategic spend categories. To address this, I conducted workshops and PowerPoint presentations, clearly delineating responsibilities. I emphasized that stakeholders would often retain the responsibility of supplier selection, but we’d use data to make those decisions smarter and faster. By framing procurement as a partner—not a gatekeeper—I gradually won their trust and fostered collaboration across the organization.

Results: Efficiency, Savings, and Long-Term Impact

The new procurement department delivered transformative results. In the first year, we achieved a 6% spend reduction on $100M in targeted spend, which increased to 8.25% in year two—translating to $6M and $8.25M in savings, respectively. Efficiency improvements were equally significant: we improved the average cash-to-cash cycle by 30 days and reduced lead times on critical inventories. For example, a key supplier began stocking long-lead-time items like axles, cutting lead times from 12 weeks to 1 week. Additional benefits included enhanced visibility into spend, improved supplier relationships through single points of contact, and better compliance with standardized processes.

Key Takeaways for Procurement Leaders

This experience taught me a hard truth: not everyone likes procurement. Many see us as slow-moving gatekeepers rather than resources and allies. Overcoming this perception requires humility, persistence, and a focus on long-term value. I learned that procurement must make stakeholders’ lives easier, often letting other departments take credit for successes, while continuously streamlining our own processes to deliver outcomes quickly.

As a procurement leader, I now approach every project with this mindset: show value, stay humble, and prioritize speed without sacrificing quality. These principles have shaped my career, from building departments to driving multimillion-dollar savings, and I’m eager to bring them to a Director of Procurement role. If you’re looking to transform your procurement function with proven leadership and a results-driven approach, I’d welcome the opportunity to connect.