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FUNDAMENTALSOF PURCHASING

SUPPLYCHAIN

OVERVIEW

Every business will have many suppliers for raw materials, water, electricity, paper, IT hardware, software and support, office furniture, office cleaning, distribution & delivery (if not in house), company vehicles and even coffee. This list could go on and on.

Purchasing management and cost reduction strategies should be geared towards generating substantial revenue from pre-existing elements without making additional revenue. This process identifies profitable procedures already in place and optimizes procedures to maximize profitability. Purchasing management & cost reduction enables businesses to identify their current needs, forecast future revenues, and understand the factors that help or prevent their cash-flow from being in a dangerous position. A successful purchasing management & cost reduction strategy includes the entire organization and all levels of management.

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DURATION

3-5 days

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FUNDAMENTALS OF PURCHASING

KEY MODULES

1. THE STRATEGIC FUNCTION OF PURCHASING

• The Link of the Purchasing Function with the Organizational Strategy

• Creating Purchasing Mission Statement

• Understanding the Concerns of Senior Management

• Balancing Quality, Service and Price

• Things Purchasing Should Strive For

2. SUPPLIER EVALUATION AND NEGOTIATION

• Negotiating with Suppliers

• Power in Negotiation

• Planning for Negotiation

• Achieving the Right Agreements with Suppliers

• Factors Used to Evaluate Suppliers on Total Performance

• Ways of Promoting Good Supplier Relations

• Creating Suppliers as Good Partners

• Choosing the Right Suppliers

3. VALUE ANALYSIS

• 16 Key Strategic Questions to Ask

• Applying the 16 Strategic Questions

• Optimizing Purchasing Productivity

4. MANAGING AND EVALUATING THE DEPARTMENT PERFORMANCE

• Centralization versus Decentralization

• Reasons for Departmental (Macro-Level) Performance Appraisal

• Managing Other Buyers

• Key Performance Indicators (KPIs) for Purchasing

5. COST SAVING STRATEGIES

• There are no quick fixes

• Reengineer your business process

• Involve the staff and management team in the cost saving process

• Track and report successes

• Just-In-Time supply strategy

• Share the success

• Collaborate with suppliers

• Eliminate paper flow

• Retender all suppliers

• Consolidate purchasing power

6. IMPROVING PURCHASING EFFICIENCY

• Evaluating Service to End Users

• Conducting the Right Surveys

• Communicating Better with End Users

• Ethical Behavior with Suppliers and End Users

• Purchasing Policies and Procedures

7. OVERALL STRATEGY CONCLUSION AND ACTION PLAN

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FUNDAMENTALS OF PURCHASING

LEARNING OUTCOMES

• Define the strategic role of the purchasing department

• Perform accurate supplier evaluation Develop effective negotiation strategies with all suppliers.

• Identify the importance of value analysis to purchasing

• Improve the efficiency of the purchasing function

• Discover cost saving strategies

• Understand supplier evaluation criteria

• Evaluate supplier contracts and offers