Implementing Best Purchasing and Supply Management Practices: Lessons from Innovative Commercial Firms

Implementing Best Purchasing and Supply Management Practices: Lessons from Innovative Commercial Firms

Implementing Best Purchasing and Supply Management Practices: Lessons from Innovative Commercial Firms

Implementing Best Purchasing and Supply Management Practices: Lessons from Innovative Commercial Firms

Synopsis

This volume explains how best in class commercial firms implement innovative practices in purchasing and supply management, with implications for goods and services acquistion in the federal government.

Excerpt

Thirty years ago, true supply chain management was almost unknown within American industry. Manufacturers usually made most of the parts that went into their finished products. When they needed to buy materials or services, they relied on purchasing departments that were seen primarily as order takers and order placers. These departments had little visibility, had little perceived value to the bottom line, and enjoyed little respect from other parts of the organization.

That scene has changed dramatically. Although few companies are as strategic as they need to be, and few apply best practices to maximum benefit, almost every company today understands the link between supply management principles and strategic goals.

More and more companies now understand the concept of becoming lean—the ability and competitive necessity of getting waste out of processes. They understand why integrating suppliers into new product development is important. Over time, the tactical purchasing function has given way to supply management processes in which highly trained professionals take a systemic, strategic approach to the drivers of total value.

The reason for the change? A changing world.

As demands increased for better quality, faster delivery, and better overall value, a few visionary leaders began to deliberately distinguish between the things that created value and the things that did not. What they discovered was that the supply chain was a huge opportunity waiting to happen. Their companies adopted best practices such as supplier development, cost management, supplier integration, strategic sourcing themselves and value engineering to stay ahead of competitors and position for future success.

Other companies resisted change too long and were forced to make traumatic adjustments when competitive and economic challenges left them two choices: manage more efficiently or fail. (A burning platform is always an effective catalyst for improvement.)

Whatever the reason for change, companies that implement purchasing and supply management best practices find that they can make their total . . .

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