Defining a procurement strategy and the operationalisation thereof.
A defined procurement strategy, standardised protocols and processes, governance and systems to support procurement.
1. Problem Statement
- The central theme of this solution is to shift from a buying culture to a sourcing culture through the introduction of standardised protocols, processes, governance and systems to the operational procurement of the company.
- The goals are to:
- Reduce risk (standardised work, rationalise product and suppliers, contract management);
- Reduce cost (improve operational capacity, optimise efficiency, online P2P system);
- Increase quality (increase visibility through BI, quality metrics, people development);
2. Solution Approach
- Create organisation wide collaboration – currently only between suppliers and business unites, central procurement department excluded from the process (includes supplier selections, orders and deliveries).
- Create governance to select and review suppliers (enforces optimum cost and service).
- Create visibility on indirect expenditures using BI:
- Define expenditure categories;
- Improve processes for master data management (adding new suppliers and materials);
- Re-design procurement process.
3. Project Outcomes
- Improved the procurement capability maturity of procurement within the company;
- Define roles and mandates of functional areas and enforce collaboration;
- Define and improve business processes:
- Procurement operations;
- Data management;
- Create visibility and rationalise the expenditure categories:
- Vendor/supplier management;
- Expenditure tracking;