Experience Creates Reliability
ZLU Consulting and Management
Purchase and Procurement
The importance of a well positioned purchase function is uncontested in regard to the production costs of a business. We all know that costs of materials make up a stately portion of the production costs and can involve between 40 to 60 % of business turnover. If a company reinvests 55 % of turnover into purchases, then cutting costs of only 1 % will typically lead to the same results, as a 20 % increase in turnover.
The goal of any business should therefore be to carefully structure a highly developed purchase function, with the task of best accessing the value adding potentials between the organisation, its staff and processes by using adapted technologies.
Key Questions
- Do the existing organisational structures mirror the ideal design and distribution of global, regional and local responsibilities?
- Are suitable models for competence, career and payment for current and future purchase employees being used?
- Do strategic processes such as purchase, order, delivery and payment go hand in hand and do you know their impact on your working capital?
- How reliable is your compliance, i.e. are the correct processes, suppliers and contract conditions being employed?
- Are the total cost of ownership of purchased materials and services known in detail, in order to fully exhaust cost cutting potentials?
- Does your IT offer adequate transparency regarding control and costs, and do you use the fitting key figures for your performance monitoring?
