Purchasing adding value for organisations.
Posted on 20th September 2018 at 12:26
With the pressure on Purchasing to chase smaller and smaller cost decreases are there other ways that they can add value to an organisation?
First off I would look at what "Added Value" looks like. Value can be defined as being what the customer is actually willing to pay for. In this instance, the "Customer" needs to be considered as the internal customer. And what they are willing to pay for is not just the Raw Material costs but also everything that happens during the production process up to the point that an item is sold and shipped out the door.
There are many ways to add value to a product:
Reduce Cost
Improve Quality
Increase Innovation
Reduce Risk
Increase Efficiency
But would all of this fall directly on a Procurement Team to achieve? Certainly Reduce Costs could be as the cost of a product to the customer is impacted by the cost of the raw materials to production.
Improving the quality of product coming in, reducing the need for Goods Inwards inspection and thereby increasing the efficiency of the internal processing time will also add value to the entire Takt Time of the end item.
Collaborative supply chain relationships will enable new innovations from suppliers to be considered earlier than your competitors, giving you that advantage over them in the market place. Staying close to suppliers may also enable your orders to be prioritised during times of supply restrictions.
Purchasing does have a key position when looking at other ways to add value to a process. Pro Outsourcing can aid your team to take a step back from the tactical activities and make more strategic decisions in order to add value to your organisation.
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