Procurement

Consulting Services & Training Modules for Procurement

 

Procurement is continuously developing due to consistent changes that have affected the way of procuring, vendor-management and logistic. The role of procurement has notably changed during the last decade and has seen an increase of influence within any organization. This change can be attributed to organizations now more than ever realizing the monetary / bottom line impact procurement represents with its interdisciplinary coordinating competencies. This development leads to procurement transforming itself more and more into an In-House Consulting unit with increasing impact on the success of the value chain along with HR, Finance, Legal, Production, Marketing and Sales. This does not mean that classical procurement tools are not important anymore, it merely demonstrates the need of a broader skillset which procurement will have to have, thus facing new challenges in a more and more globalized world. It’s being a good networker, combined with high affinity of (internal) customer needs, while finding the right equilibrium of suiting those needs combined with entrepreneurial governance. That is where our expertise is best placed, in order to support this transition of our clients, improving interfaces between divisions and finding undiscovered ways of cost optimization.

Our main focus areas are:

Within porcurement organisation & management it is all about the best organisational set up, as well as reputation and useage of your procurement unit within your company. In the area of cost optimization, we mainly focus on “best in class” sourcing practices and strategies, specialized projects and purchasing. Especially the trend of companies conducting global purchase initiatives in comparison to producing the very item themselves has seen increased significance during the last decade. This increased procurement volume leads inevitably to a higher cost proportion management and results therefore in an increased P&L effect responsibility, particularly whenever savings can be achieved. In Vendor management we support you by categorizing and identifying your strategic vendors and how to best approach them in favor of sustainable relationships, applying tactical methods. Contracts & Negotiations are drivers for quality and risk protection and therefore a key area within procurement.

 

1. Procurement organization & -management

The foundation of any good procurement organization is an efficient, powerful set up as well as clear rules & responsibilities, visible to the entire organization. To provide the procurement organisation the best possible start, it needs to be introduced combined with methods of best organizational alignment. We help you with the implementation or restructuring your existing department so, that ”your” procurement finds its place and appreciation in your company.

Potential consulting areas could be:

  • Building up/ restructuring of a local/global Procurement organisation
  • Disruptive procurement transformation
  • In- & outsourcing functions
  • Guidelines & processes
  • Procurement controlling (KPIs, Purchasing Compliance, etc.)
  • Internal acceptance of procurement and improving collaboration with other business units
  • Ghost negotiation and negotiation tactics

 

2. Cost optimization

To achieve proper cost optimization we must identify all relevant cost elements and -drivers. This in so far crucial, as for the total cost of ownership (TCO) approach, as all cost will be analyzed that occur during the life cycle of purchased goods and services. Only if this is ensured, cost can be benchmarked globally, via sourcing projects or auctions/biddings. We are happy to support you on reviewing and optimizing your cost benchmark methods.

Potential consulting areas could be:

  • Total Cost of Ownership/ Lifecycle Analysis
  • Target Cost Analysis
  • Optimization of Sourcing projects/RFx (local/international), starting from how to develop a service level agreement (SLA), Demand/Supply Analysis till negotiations for best pricing and contracts
  • Purchasing tactics, like spot-buying, bidding/auction, rate cards etc.

 

3. Vendor Management

Our main focus is supporting you in implementing a sustainable approach on handling your vendor base. Categorizing and managing your vendors in a way that builds  a partnership, that supports your value chain in the best way possible. Perfromance measuring at this junction is as important as having the right vendor strategy. Especially when it comes to developing emergency plans in case a vendor is not able to supply.

Potential consulting areas could be:

  • Vendor base analsysis
  • Performance- & risk analysis methods
  • Vendor feedback talks and target alignment
  • Make or buy analysis
  • Development of emergency plans for critical vendors and those with high dependency
  • Moderating of vendor innovation workshops in order to optimize collaboration, logistic cost, value chain, etc.

 

4. Contract & Negotiations

Risk reduction along the value chain is only possible, if all divisions cooperate smoothly by not engaging clients with multiple, varying terms & conditions in comparison to those of the corresponding vendors. Apart from that, is a solid framework key to risk prevention or finding automatics for contract violations, like penalties for late or inadequate deliveries, as an example. This is followed by successful pricing negotiations (can handle as well by us), which represents the last hurdle to manage and overcome prior to entering in a business relationship with the vendor.

Potential consulting areas could be:

  • Frame agreement & General purchasing conditions development (econm. View)
  • Analysis of service level agreements
  • Negotiation preparation & preparation of defending best contractual points