Organizational Structure and Performance

Does your company’s procurement organizational structure allow the group to maximize its’ performance?

World class companies require high performing organizations. To have this kind of procurement organization requires structure, culture and resources. Each company is different.

Departments must be designed to meet the needs of the business model yet perform to high standards. Here are four areas that companies address.

Alignment of Business and Department Objectives

Is your procurement group aligned in its’ strategies and objectives? Companies are successful because they plan, lead, organize, and manage their performance.

Business objectives are driven top down, while the procurement department strategies and objectives are derived from the business objectives.

MSCS can evaluate the effectiveness and alignment of the objectives in your procurement organization. We review the strategy, budgets and policies and see if they are synchronized with the business objectives.

Operational Structure

Understandably, procurement organizations need structure. But the ‘right’ procurement organizational structure enables your employees to maximize their performance. Clear lines of authority, responsibility and accountability are vital when working as a team towards company goals. Likewise, it is important to analyze workload and manpower requirements and locate specific talent if necessary.

Benchmarking and Management by Objectives (MBOs)

It is important to know how well the procurement organizational structure is performing with respect to its industry. Therefore, we benchmark current performance using industry leading performance indicators.

Also, it is necessary for the company to understand if it is meeting its own stated business objectives. This is also accomplished using key performance indicators (KPIs) and a custom made dashboard for your operation.

In much the same manner, it is necessary for you to measure the performance of individual departments and employees. Employees should be measured using the department goals.

One of the ways firms accomplish this, working on teams in a business environment, is by using Management by Objectives (MBOs).

Training

Firms want their employees to grow in knowledge, technical, and conceptual skills. Based on an
initial assessment, a training program can be developed based on their needs.

Related Topics

Process Management. It is important to have effective business processes in place. Otherwise it is very difficult to reach high performance levels. For more on this topic, please follow this link.

Procurement Strategy. Executives today expect results. Successful companies satisfy customers with their products and services, making ‘targeted’ profits while doing so. Because of this, the procurement group is expected to play a much larger role and bring value to the entire business enterprise. For more on this topic, please follow this link.

Transforming Procurement Operations. Today, procurement is expected to play a much larger role and bring value to the entire business enterprise. That is, having an uninterrupted supply of materials at reduced costs. Some organizations have difficulty migrating their legacy processes to more advanced procurement models. For more on this topic, please follow this link.

Manufacturing and Supply Chain Services

We are Manufacturing and Supply Chain Services, MSCS, specializing in ‘enterprise wide’ production and operations management programs. Our company’s proprietary processes and services promote organization, control and cost reduction boosting your company’s bottom line. How can we help you?

Learn more about MSCS’s procurement and supply chain programs.