Purchase Efficiency

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Purchase Efficiency

Post  Vadivelrajan on Sat Jan 15, 2011 12:35 am

I am sharing another piece of information I came across:

Getting more spend under a purchasing department's management
is a common goal. Achieving it often requires using points
like these to convince senior management to support a change...

1. Purchasing personnel are measured on their performance of
purchasing processes. Other departments are measured on
different contributions to the organization. Assigning
purchasing responsibility to these other departments keeps
them from spending time on their primary functions within
the organization.

2. Purchasing personnel are trained in cost savings techniques
like negotiation and strategic sourcing. Engineers,
department heads, and other internal customers are typically
not, which can lead to paying higher prices.

3. The purchasing department has savings-generating tools, such
as eSourcing systems, at their disposal. Other departments
do not.

4. The purchasing department is good at identifying
alternatives, then guiding the organization to select the
best option. Too often, internal customers just go with the
first supplier found, committing the organization to a
suboptimal arrangement that endures for years.

5. By working with all departments, the purchasing department
is aware of enterprise-wide standards. As such, it can
leverage aggregated volume for lower costs, minimize
inventory, and avoid pitfalls previously identified with
competing products.

6. Purchasing personnel are trained at evaluating supplier
viability. Engineers, department heads, and other internal
customers are not, which can result in the selection of a
supplier that goes out of business during the course of the

7. It's not uncommon for suppliers to charge different
departments within the same organization different prices
when they can get away with it. By having the purchasing
department provide center-led oversight, the organization
can have more assurance that all departments are benefitting
from the organization's leveraged buying power.

Any one there to add more to this?

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