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    Chapter 4 PDF

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    Ani Solotac
    The document discusses approaches to strategic purchasing including automating planning processes to free up staff for other tasks and focusing on buying habits, processes, and behaviors to benefit the company. Strategic purchasing is described as an ongoing process involving interactions between purchasing professionals, suppliers, and company management. Twelve characteristics that distinguish strategic purchasing departments from tactical ones are also outlined, such as spend analysis, supplier relationship management, technology implementation, and category management.

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    Chapter 4 PDF

    Uploaded by

    Ani Solotac
    59 views8 pages
    The document discusses approaches to strategic purchasing including automating planning processes to free up staff for other tasks and focusing on buying habits, processes, and behaviors to benefit the company. Strategic purchasing is described as an ongoing process involving interactions between purchasing professionals, suppliers, and company management. Twelve characteristics that distinguish strategic purchasing departments from tactical ones are also outlined, such as spend analysis, supplier relationship management, technology implementation, and category management.

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    The document discusses approaches to strategic purchasing including automating planning processes to free up staff for other tasks and focusing on buying habits, processes, and behaviors to benefit the company. Strategic purchasing is described as an ongoing process involving interactions between purchasing professionals, suppliers, and company management. Twelve characteristics that distinguish strategic purchasing departments from tactical ones are also outlined, such as spend analysis, supplier relationship management, technology implementation, and category management.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    59 views8 pages

    Chapter 4 PDF

    Uploaded by

    Ani Solotac
    The document discusses approaches to strategic purchasing including automating planning processes to free up staff for other tasks and focusing on buying habits, processes, and behaviors to benefit the company. Strategic purchasing is described as an ongoing process involving interactions between purchasing professionals, suppliers, and company management. Twelve characteristics that distinguish strategic purchasing departments from tactical ones are also outlined, such as spend analysis, supplier relationship management, technology implementation, and category management.

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    Strategic Purchasing:

    ❖ Approaches to Strategic Purchasing:


    • The use of strategic planning also means automating as much of the
    planning process as possible. This free purchasing staff to focus on
    other aspects of the purchasing process and this increase the changes of
    using available resources with more efficiency.

    • In the end, these approaches are all about buying habits, processes,
    and behaviors so that the company enjoys the most benefit. From
    this perspective, strategic purchasing is not an event, but an outgoing
    process that involves the interaction of purchasing professionals with
    suppliers, and the management arm of the company.
    What is Strategic Plan?
    Strategic Plan:
    • Purchasing managers should have a strategic plan, and
    then use effective buying tactics to carry it out.

    • By definition a “Strategy” is a plan to reach long – term goals


    that takes one year or longer to complete.

    • Strategy gives direction while tactics form the basis for


    handling the various battles of the day.
    Strategic Purchasing Planning:
    • Strategic Purchasing Planning seeks to identify critical long – range
    supply issues, and to foresee sourcing changes.

    • This reduces uncertainty by formalizing analytical and creative


    thinking in cost reduction.

    • Strategic Purchasing Planning is a necessity for purchasing to


    become predictive and proactive, rather than reactive with short –
    term problem solving.

    • Interpreting the strategic implications of global supply assurance for


    the company is a purchasing management responsibility.
    Transforming Your Purcahsing Department
    from Tactical to Strategic
    ❖ 12 Characteristics of Strategic, in contrast to Tactical:
    • Spend Analysis – is a strategic purchasing teams examine
    the amount of money they spent in each category of goods and services
    and use this analysis to identify opportunities for improvement

    • Supplier – Relationship Management – measures the supplier


    performance and regularly spend time meeting with suppliers to
    implement improvements.

    • Technology Implementation – frequently update and add technologies


    that measurably reduce costs, decrease cycle time and make the process
    more efficient.
    Transforming Your Purcahsing Department
    from Tactical to Strategic
    • Develop Project Plans – use project management practices to map out
    both recurring activities and one – time projects.

    • Enterprise – Wide Contracts – consolidate spend across all parts of


    the firm and enter into contracts with a limited supply base to serve the
    needs of the entire firm.

    • Involvement Specification Development – are involved at the early


    stages of specification development, lending specialized knowledge
    in materials availability, cost drivers, standard parts, and reliability
    of supply.
    Transforming Your Purcahsing Department
    from Tactical to Strategic
    • Development of Productivity Tools – develop tools so repetitive tasks
    can be done more quickly and error free.

    • Supplier Development – don’t blindly accept the suppliers and


    products that are currently available. They work with suppliers to
    develop need capabilities or products that will improve cost or quality.

    • Work Responsibility Refinement – constantly identify ways to


    automate, delegate or eliminate tactical, non – value added work.
    Transforming Your Purcahsing Department
    from Tactical to Strategic
    • Forecasting – regularly document changes that they forsee in price levels,
    availability, and markets to ensure a competitive advantage for their
    companies.

    • Risk Management – involves in identifying risk in procurement


    contracts, analyzing and developing mitigating responses to risks.

    • Category Management – is a structured approach to the procurement


    of goods and services and applies best practices tools and techniques in
    the development and implementation of an integrated category strategy
    aligned to the organization needs.

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