!! Terms “Procurement” & “Purchasing” often used interchangeably..but they are different !!
procurement: operational aspect of buying something)
more strategic
“Purchase order”
Supplier Goods 2
Customer
Invoice
SAP SAP
Money $ 3 1
“Sales order”
Procurement Mgt is about ….
1
,The 5R’s of Procurement
• The 5 Rights of Procurement .. - In the Right Place
- At the Right Time.
- In the Right Quantity, • Extensions to 6R, 7R, ….
- At the Right Quality - To Acquire the right material
- At the Right Price - From the Right Supplier
Business Context
• Which Business Context are we in ?
- Which Economic Sector ?
- Which Type of Business : B2B, B2C, .. ?
- Which Company size ?
- What is the Company structure ?
4 Economic Sectors
Primary sector: focuses on cost
Service Industries: focus on adding value
(B2B & B2C doesn’t make much difference from a
procurement POV)
Porter Value Chain model
2
,• A typical company structure..including supporting services
• Supporting activities are working for all departments/primary activites
What’s Procurement’s place in the Value Chain?
• Although Procurement department is typically as ‘supporting service’, it is of strategic
importance
• A well-organized procurement department will be the source of intelligence to know:
- Who you are sourcing and procuring goods/services from?
- How those goods/services are being produced or delivered?
- Why you are procuring from those particular suppliers?
- When to eliminate defective/non-compliant suppliers?
• Purchasing is seen as an area for adding value, not simply reducing costs.
• Reducing price and availability risks in the supply chain
• Awareness that active supplier involvement can increase efficiency and
effectiveness.
• A developing recognition that concern with strategic costs of supply and total cost of
ownership (TCO), rather than short-term price, is important.
TCO= doesn’t only look at initial cost, BUT full cost
Exercise: You are buying a car with a budget of 10.000 $
electric car 59.000 $
Or
Diesel/Gas car 25.000 $
answer: If you only look at the initial price, you will choose for diesel, but if maintenance will
cost you more in the long run.
Procurement Roles/Functions
Function: full time job
Role: temporary thing that you have to execute
• Variations depending on company size
3
, Procurement role : isolated ?
• Not an isolated role/function
• Interaction with many colleagues/departments INSIDE the company
• Interaction with suppliers OUTSIDE the company
Interaction with others
• A procurement role/functions is never working at its own
• Does she/he knows al the details of the goods to be purchased ?
• Typically working for an ”Internal Customer”
- Defining the “needs” & the details (see Specifications”)
• For significant purchases, a DMU (Decision Making Unit) is composed
DMU (Decision Making Unit)
• What ?
- team of individuals who participate in a buyer decision process.
- relates to business or organizational buying decisions.
• Why ?
- Minimalise the risk by involving as many people as possible in the
decision making process.
• Who ?
Typical Roles:
The future of procurement mgt
4
Les avantages d'acheter des résumés chez Stuvia:
Qualité garantie par les avis des clients
Les clients de Stuvia ont évalués plus de 700 000 résumés. C'est comme ça que vous savez que vous achetez les meilleurs documents.
L’achat facile et rapide
Vous pouvez payer rapidement avec iDeal, carte de crédit ou Stuvia-crédit pour les résumés. Il n'y a pas d'adhésion nécessaire.
Focus sur l’essentiel
Vos camarades écrivent eux-mêmes les notes d’étude, c’est pourquoi les documents sont toujours fiables et à jour. Cela garantit que vous arrivez rapidement au coeur du matériel.
Foire aux questions
Qu'est-ce que j'obtiens en achetant ce document ?
Vous obtenez un PDF, disponible immédiatement après votre achat. Le document acheté est accessible à tout moment, n'importe où et indéfiniment via votre profil.
Garantie de remboursement : comment ça marche ?
Notre garantie de satisfaction garantit que vous trouverez toujours un document d'étude qui vous convient. Vous remplissez un formulaire et notre équipe du service client s'occupe du reste.
Auprès de qui est-ce que j'achète ce résumé ?
Stuvia est une place de marché. Alors, vous n'achetez donc pas ce document chez nous, mais auprès du vendeur irdjanbiserova. Stuvia facilite les paiements au vendeur.
Est-ce que j'aurai un abonnement?
Non, vous n'achetez ce résumé que pour €6,49. Vous n'êtes lié à rien après votre achat.