Procurement and supply management
Given that the total procurement spend in most companies comprises more than 60% of total costs, there is a significant potential to obtain cost reductions that have a large impact on bottom line results. Dawson Consulting has a number of services that can benefit the financial performance of companies that procure goods and services, both core to their operation or non-core.
Specific areas that our consulting team can help your company with are:
- Audit of Procurement Potential
- Procurement Strategy Development
- Procurement Process Design
- Supplier Selection & Implementation
- Performance Management.
Audit of Procurement Potential
Auditing your procurement activities can identify opportunities that can be leveraged from adopting best in class procurement practices. The audit will evaluate spend categories and volumes and benchmark these giving particular attention to existing supplier arrangements, information and product flows and internal processes. This will lead to an evaluation of ?fit? between procurement activities and business strategy and then an assessment of ?fit? between suppliers and the business.
Procurement Strategy Development
An essential element in any business is the development of a plan that ensures that maximum procurement benefit and compatibility with other business imperatives.
Through researching and understanding how the business works and its objectives, a strategy can then be developed for procurement that addresses:
- Organisational procurement structure
- Business risks that have to be managed
- Methodologies that should be employed
- The capacity for benefits from employing emerging technologies such as eBusiness
Procurement Process Design
Procurement processes must be appropriate and efficient so that the business can achieve planned procurement outcomes at low cost.
By defining current processes and organization structure and comparing these with the requirements dictated by the procurement strategy, gaps in process effectiveness and efficiency can be identified. This becomes the base line for mapping optimum processes with the attendant information flows, structure and interfaces to other functions.
Supplier Selection & Implementation
A supplier base must be developed that can consistently deliver best value outcomes in terms of direct price, value-added benefits and supply chain efficiency. The use of detailed requirements specifications, a rigorous methodology, and appropriate evaluation models will enable the identification of suppliers that are a good fit with the business and that can consistently deliver benefits now and into the future. Our consulting team are then able to assist in managing the implementation of changed or new supplier arrangements in a way that ensures delivery of expected benefits and that minimizes business disruption.
Businesses need to have a systematic way of monitoring progress and outcomes that triggers corrective action as required. Therefore, a set of appropriate key performance measures for the critical elements of procurement arrangements must be developed. A system of review and communication between the business and the supplier must be implemented and defined steps for corrective action developed and a feedback loop must be designed to ensure that continuous improvement occurs.