Transforming Procurement Operations

Today, procurement is expected to play a much larger role and bring value to the entire business enterprise. This expectation means having an uninterrupted supply of materials at reduced costs.

Is your procurement group supporting operations, by getting the right products at the right time, and helping the company make ‘targeted profits’ when doing so?

Some organizations have difficulty migrating their legacy processes to advanced procurement models. This can be made easier with an ‘all-inclusive’ approach by integrating team members, promoting ownership, and answering the question ‘why’ and not just the ‘what’ and ‘how.’

In helping companies transform their operations, it is important to focus on three areas: Procurement Strategy, Personnel, and Process Management.

Procurement Strategy

The entire process begins with aligning the department’s strategy and company objectives. Also, it is necessary to review the department’s processes and programs to see that they are supporting department objectives. Likewise, the workloads are reviewed to determine resource need. Next, budgets are aligned.

Personnel Management

Department strategy and objectives provide guidelines for reaching business goals. However, the company will have a difficult time being successful without enough resources or the right talent. The question is, “does your company have the right personnel, with the right capabilities, in the right positions?”

It is necessary to review these issues and make recommendations to fill any gaps that are identified and/or provide the necessary training. There may be times when it will be necessary to locate additional talent to fill specific roles.

Process Management

There are times when the company has the right vision and talent, but fails to meet standards or objectives. Typically, it is necessary to,

  • Assess and Benchmark the department’s effectiveness
  • Map all processes and review the tools used
  • Identify any gaps, and develop customized solutions
  • Suggest new technologies whenever and wherever applicable
  • Construct pilot program, processes, and tools
  • Review solutions with management
  • Implementation of pilot program, in parallel, and conduct testing

The Bottom Line

Let’s face it, the organization is relying more and more on procurement to add value to the organization. This means that the Purchasing strategy must be aligned with the company’s business objectives. Furthermore, the right personnel must be in place to achieve goals. Finally, the right processes must be used otherwise it will be much more difficult to reach the objectives that have been tasked to the department.

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.

Organizational Structure and Performance. Top performing organizations require structure, culture and resources to produce high performance. Departments designed around four areas achieve high performance levels. 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?

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