Please enable JavaScript.
Coggle requires JavaScript to display documents.
STRATEGIC ROLES OF PROCUREMENT - Coggle Diagram
STRATEGIC ROLES OF PROCUREMENT
Supplier relationship management & supply chain risk
Scope
Cost of goods and services
Force majeure events
Business continuity safeguards
Role
sharing long-term business goals
negotiations based on genuine business objectives
a joint commitment to continuous improvement
Due diligence
& Legal
Role
Within a procurement context
it includes consideration
of the supplier’s:
1.Evaluate hidden risks
2.Provide effective standard appraisal through survey
3.important in investment and trad
Scope
2.Jurisdiction
3.Supplier’s insurance provision
1.Product liability accountability
4.Clarity of specifications
Risk management
& Finance
Risk management of the supply chain
Identifying supply chain risks + developing acceptable risk mitigation strategies is a hallmark of a strategically focused procurement operation. included:
Those risks that only the supplier can manage
Those risks that only the buying organisation can manage
Those risks that must be jointly managed by the supplier and the buying organisation.
Indicative areas of financial strategic consideration for procurement:
Financial strategic consideration:
Supplier payment terms
Bought in price of goods & services
Contract termination costs
Currency fluctuations impacting on bought in price of goods & service
Delivery late on goods, services, projects
change in scopes of specification
payment of supplier 'up-front' fees
late payment to suppliers
Invesment in inventory & Managing obstacles to change
Working capital cost
Danger of product changes
Distribution network costs
Strategic warehouseing facilities
Role
Scope
Avoiding fixation on existing suppliers
Ensuring product sample are robustly tested
Avoidance of malpractice with existing suppliers
Management customer preferences
Right to terminate contracts for convenience
Willingness to increase annual performance obligations
Change in buyer’s category management portfolio
Relevant use of small/medium enterprises
Continuous improvement & Operational
Benefits of continuous improvement:
• Improved quality
• Increase efficiency
• Cost reduction
• Improve customer satisfaction
• Increase employee engagement levels
Continuous improvement (CI) is an ongoing effort to improve a product, service, or process. Focus of Cl is about creating a culture of continuous learning and improvement, where everyone is empowered to identify and implement better ways of doing things.
• Plan: Identify areas that need improvement and develop a plan to implement changes.
• Execute: Carry out the plan and implement changes to processes, products or services.
• Test: Measure the results of changes and identify any areas that require further improvement.
• Action: Make adjustments to the plan and continue implementing changes.
Investment in 'right first time'
& Technology
Investment in “right first time” and technology
-Add value to a procurement
-Ensuring the specified quality can be satisfied or exceeded.
-Advise on through-life costs.
-Maintenance support.
-Improvement.
-Inspection and testing.
Scope
The scope of the supplier's investment in 'right first time' (RFT) and technology is broad and encompasses various aspects of their operations. It involves investing in technology, processes, and people to achieve the goal of delivering products or services correctly the first time, eliminating defects, and enhancing overall quality.
-Automated Inspection Systems
-Laser Measuring Devices
-Statistical Process Control (SPC) Software
-Data Analytics Tools
-Employee Training and Empowerment
Skill Development and Upskilling
Continuous Improvement Culture
-Supplier-Buyer Collaboration