LBB International

Over the past few years purchasing as a discipline has changed significantly. This is reflected in the increased attention from business managers and practitioners. Considering the increasing amount of money generally involved in purchasing and supply decisions, this is not more than logic.

Importance of Procurement

Purchasing volume has increased to 80-90% of the turnover in most manufacturing industries
Procurement is a key determinant in the cost of an end-product
Procurement determines to a high degree the quality of the end-product and service level of an organisation
Procurement has more impact on cost reduction than any other function in the organisation

The Purchasing process

Source: The purchasing process model (van Weele, 2002)

Procurement Control
The purchasing process is complex. Experience, insights and business mentality are important, but need to be supported by data and numbers. The right application of the quantitative approach provides additional insights and contributes to a professional role of the purchasing function in the organisation. A so-called ‘spend analysis’ is the right tool for this. Over the past years, LBB International has developed a comprehensive spend analysis covering a quantitative analysis, qualitative assessment and a purchase action plan. The quantitative analysis all purchases done over a period of normally 12 months is based on invoices. The qualitative assessment addresses the purchasing policy, processes, methods & procedures, organisation, act and purchasing performance. An annual repeat of the spend analysis is recommended to achieve purchasing excellence.

LBB International conducts an exclusive 3-day Master class in Purchasing Excellence. For more information contact our office.