PURCHASING STRATEGY.pptx
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The document discusses procurement strategy and outlines several key points: 1) Procurement strategy is determined by an organization's competitive priorities, resource capabilities, and operating environment. 2) When developing a procurement strategy, an organization must consider its competitive priorities, strengths and weaknesses, and the competitive landscape. 3) A strategic procurement approach can provide benefits like supply continuity, improved business performance, and optimizing the supplier base.
PURCHASING STRATEGY.pptx
- 1. PROCUREMENT STRATEGY How to create value in increasing complex business world Presented By : Nikunj Jain https://www.linkedin.com/in/nikunjjain262/
- 2. P 2 P Cycle O 2 C Cycle SUPPLIERS MANUFACTURER CUSTOMER MATERIAL FLOW (PRODUCT / MRO) CASH FLOW REVERSE PRODUCT FLOW INFORMATION FLOW SUPPLY CHAIN FLOW & PROCESSES
- 3. - Purchasing decision or actions that constitute purchasing strategy are determined by the firm’s competitive priorities, it’s resource capabilities, and the environment - In the formulation of purchasing strategy, the organization competitive priorities, the organizations strength & weaknesses, and the competitive environment must be considered STRATEGIC PROCUREMENT
- 4. Supply continuity .Developing relationship with Key suppliers .Discourage Maverick buying . Improved Business Performance. Managing the procurement process efficiently and effectively Develop Supply Base Management which should always remain optimally pruned .Eliminating Redundancies and unrationalized choices . Shifting from Manual to Automation throughout the organization’s procurement processes . WHY PROCUREMENT STRATEGY
- 5. PROCUREMENT
- 7. To acquire goods and / or services - At the best possible total cost, - In the right Qty, - In the right Quality, - At the right time, - In the right place & - From the right source - In the Right Condition for the direct benefit or use of our organization. PROCURMENT MISSION
- 8. PROCUREMENT STRATEGY Targets & Plans Procurement & Market Analytics Procurement Assessment Gap Analysis Strategic Roadmap Opportunity Prioritiztion Vision & Targets Resource Plans DEVELOPING PROCUREMENT MISSION
- 9. OPERATIONS • Procurement Cost • Quality & Service SPENT FORECAST • Savings Forecast • Demand Forecast . REVENUE IMPACT • Savings BUSINESS DATA • Strategic Business Plans • Budgets ECONOMIC DATA • Commodity Indices • Economic Forecast • Supplier Acquisitions FINACIAL DATA • Projected Revenues • Projected Cash Flows • Growth PROCUREMENT STRATEGY PROCUREMENT STRATEGY
- 10. DEVELOPING PROCUREMENT STRATEGY PLAN TO IMPROVE COMPANY’S COMPETITIVENESS Supply Base Market • Knowledge of supplier base • Development of key suppliers • Supply base development and innovation Procurement Positioning • Key Supplier relationship management • Annual purchasing plan, actions, objectives etc Procurement Organization • Procurement area interactions and influence • Team Development strategy, career growth Spend Cycle Control • Continuous improvement of operational process • Contract negotiation and evaluation Strategic Purchasing Plan
- 11. MAKING THE PROCUREMENT STRATEGIC DECISISON
- 12. Supplier Optimization (Optimize the supplier base to simplify the procurement process) TQM Practice (Customer & supplier relationship Management) Risk Management (uncertainties & complexities causing supply chain supply chain disruption, dealt with risk management) Global Sourcing (Provided opportunity to source latest skills & resources, enhanced productivity) Vendor Development (Efficiency built-up) Green Purchasing (Helps in cost saving, minimize supply chain risk, enhanced brand image) CORE PROCUREMENT STRATEGIES
- 13. • Low Risk • High Cost • Low Risk • Low Cost • High Risk • High Cost • High Risk • Low Cost Bottleneck Items Strategic Items Routine Items Leverage Items - Ensure Supply - Acquire Capability - Create Capability - Invest in suppliers - Simplify & Automate - Multiple Suppliers - Built Partnership - Acquire Capability - Create in house Capability - Invest in suppliers to ensure timely availability - Exploit purchasing power & minimize cost STRATEGIC PROCUREMENT MATRIX
- 14. Low Expenditure High Risk High Expenditure High Risk Low Expenditure Low Risk High Expenditure Low Risk Market Condition & Risk Expenditure (Profit Impact) STRATEGIC PURCHASE TACTICAL PURCHASE STRATEGIC PROCUREMENT MATRIX