Purchasing functions typically control a large portion of organizations costs both in spend and overhead- their function is typically to purchase materials and services for use in either manufacturing or for direct resale. A typical purchasing team will manage a number of suppliers and act as the interface to these for the business, where materials are required.
Business improvement activities can bring significant benefits to companies through either lowering overhead or costs and improving efficiency. Purchasing functions are not isolated from this and there are many projects that can be undertaken within procurement to deliver additional value to their parent organizations.
In this article we look at 5 improvement ideas for purchasing teams to try out in 2007.
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1. Get Leaner
Purchasing teams are renowned for being bureaucratic - from requisition and authorization through to eventual distribution - processes can be "paper" intensive and overtly complicated. In 2007 why not set about dusting down your business processes and cutting the fat - look for excessive steps - are 3 signatures on every Purchase order really required$%: Analyze your processes end to end - what adds value - what doesn't - what can be cut out or automated$%:
2. Assess Training needs
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The CIPS organization suggest a toolkit for anyone involved in purchasing - this contains fundamentals on Purchasing, Negotiation, Relationship Management, Contract Management to name but a few - take a good look at your team - does everyone have the right skills$%: Correctly trained staff help lower business risks (correct T:%$amp;C's for example) and get more done quicker.
3. Visit your suppliers
Any idea who your top 10 suppliers are$%: When did you last visit them$%: Relationships with your major suppliers can be crucial to your success - why not set up a quarterly review with your major suppliers - use these to assess performance - discuss capabilities and future requirements - closer collaboration will reap rewards.
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4. Know your customer
Badger your sales team to get you involved with your end customer - knowing what they think of the products that you help put together can be vital in making purchasing decisions - are they happy with the quality of your products - what projects do they have coming up (how does this meet your supplier profile), Do they have any problems that you may be able to influence.
5. Measure, Measure, Measure
Understand your performance - the adage "you cant manage what you can't see" is truer today than it's ever been - understand your spend profile, know your commodities - understand your supplier delivery performance - Speak to your IT department - get hold of that data and know your business - make it accessible to your team- you might be surprised what you might find.
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