Control in the purchasing & supply function (Assessment (Number of…
Control in the purchasing & supply function
The measure adopted to ensure that purchasing & supply objectives are pursued within acceptable standards & guidelines
Number of purchasing contracts established
The knowledge and skills to lead
The leadership shown in the introduction of new ideas, systems, approaches or strategies
The relationships established with suppliers
An evaluation sheet or questionnaire can be used to asses management performance in purchasing. This may include aspects such as:
The adequacy of performance appraisal and control systems
The contribution of cross-functional teams
The role in the management of supply chains
The steps in the control process are setting objectives, setting criteria & norms, measuring actual performance, comparing actual performance with the norms, studying deviations & taking corrective measures
The assessment of purchasing & supply activities
Timeliness by noting the number of orders indicated as urgent & the number of operations interrupted by shortages
Cost saving by comparing costs with those of previous periods
Supplier performance by noting rejected orders, orders receive late
Workload by looking at the number of orders & requisitions
Price proficiency by comparing actual prices with planned or market prices
Purchasing costs by expressing administrative costs as a percentage of the monetary value of purchases.
Inventory holding by calculating inventory turnover, inventory loses & obsolescence
Relationship with suppliers by a scrutiny of supplier turnover or number of alliances.
Once these measurement criteria have been laid down, the actual results can be measured & compared with a standard norm such as past performance/the results of similar business.