In this article, we will talk about a very important lever in cost reduction and an element of the procurement cycle - sourcing. In our practice, the cost of high-quality sourcing pays off 5 times or more.
If a year ago Procurement could fix the price for 6 months, 1 or even 2 years, today this fixation is impossible or is very expensive. Today, in the context of volatile Markets, Procurement is forced to revise its strategies, and this article will focus on the main ones.
"How to improve the efficiency of the enterprise?" and "Where to find added value?" Some answers may lie on the surface and have been in the arsenal of companies for a long time, such as “sell more and faster” and / or “cut the budget”, but not all solutions are obvious at first approximation. Today we will talk about one of them - Procurement Outsourcing (PO).
Despite the enormous contribution to the creation of added value, which can bring competent cost management, the reality is that in many sectors, procurement is still mainly a service function with limited mandate.
After publication of the article “Procurement Savings vs Budget”, I planned to consider in detail the impact of Inflation on the indicators of procurement savings, however, the topic of the Budget caused heated discussions, and I decided to continue it.
The HR Director burst into our office and said from the threshold: Vyshlova! You will work in procurement! I was dumbfounded: What?... We do not have such a department .... But he insisted: From today there is!
On the field of disputes around the methodology for calculating procurement savings, there has already been enough crossing of swords. Yes, indeed, there are no uniform universal calculation rules. However, you should always remember the goal: the calculation of savings should reflect the contribution of Procurement to the result of the company!
Regardless of whether the company has a dedicated procurement function or the process is decentralized, whether you create a team or join an already existing one, or the company realizes the need for change at some time, everything starts with people....