Developing A World Class Procurement Capability

The complete Procurement Model to Maximising Results

DIAGNOSTIC– METHODOLOGY

Overview

• Programme outline to ‘synchronise’ with Strategy
• Build detailed spend
• Identify high value opportunities
• Build sustainable improvement processes
• Measure, Monitor, Improve

The first 2 to 6 weeks (variable on business size, goals)

• Create spend ‘map’
• Review current practices
• Identify Categories
• Review organisational capabilities (Procurement) against Best Practice
• Business segmentation
• Consider future business developments

Opportunities abound! – Adding, say, $Xm  every year to the Business….

• Builds balance sheet
• Creates value for new opportunities
• Builds internal capability, pride, loyalty operating at World’s Best Practice
• Organisational

Key improvement activities

• Develop  Procurement as a ‘Strategic Value Add’ for the business
• Establish team(s) to suit the Wave 1, 2, & 3 activities, timelines
• Identify Gaps in the processes and systems
• Develop monitoring tools
• Risk Management, including Security of Supplies

Outcomes

• Substantive value added to Business (bankable returns)
• Worlds Best Practice in Procurement.
• Competitive Strategies
• Avoids Competitive disadvantage (competitors may have commenced their own strategic procurement programmes)
• Governance Standards
• Nimble processes adapting to changes in the environment
• Results focussed department

DEVELOPING A WORLD CLASS PROCUREMENT CAPABILITY

THE DECISION METRIC

Summary

The value of a successful programme can be measured in ‘real currency’.

Mr Sam Trifiletti, a leading procurement expert, commented “the cost of the external commitment to kick start a programme is actually nil as the savings from the programme always outstrip the few dollars paid to the external parties… in fact the company is losing money until it starts the programme.”