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Lesson 3 – Purchasing Strategy 101 – Learn the core strategic roles in purchasing management.

Lesson 3 – Purchasing  Strategy 101 – Learn the core strategic roles in purchasing management.


You may wonder what kinds of purchasing issues
are grabbing attention of the executives, VPs, CEOs. Certainly, they are always interested
because of the purchasing importance for the business. My name is Americo Cunha, in this lesson,
we will be working on strategic roles of purchasing. Welcome, and let’s start learning. The strategic vision on purchasing is mainly
related to supply continuity, quality, and costs. Supply assurance has an special attention
and the five rights portrait very well the challenges to be managed. Ok, let’s discuss 7 critical dimensions
of the purchasing function First the spend analysis. It is based on historical data
and should display all expenses broke down per item
per period and per business unit. It is important to get consumption numbers
because they are crucial to demand management. Consumption rate, sales, and production forecasts
are the primary inputs to define sourcing strategies,
capacity levels and to assure the supply required for business operations. Here, the Purchasing personnel should gather
technical and functional requirements. They have to ensure that all transactions
are well documented. By combining requirements from distinct areas,
they can reduce the overall cost. The purchasing team develops insights
to align internal needs and external sources. To facilitate the work,
internal resources and external sources are grouped by related products and type of
application. Supplier evaluation is one of the most important
activity conduct by the purchasing team. The primary objective is to reduce supply
risks and optimize the value added to the company. These two tasks are under the direct responsibility
of the purchasing team, contract and cost management. The purchasing department is usually the primary
contact with suppliers. And also should control and manage the purchasing
costs. Requisitioning, RFI, RFP, RFQ,
Contract Award, Orders, Approval, Receipt, Payment are some of the tasks of the procure-to-pay
process. We will be workING on this topic deeper in
a future lessons. Here, the purchasing team works on day-to-day
transactions to mitigate supply risks, identity opportunities
for cost reduction and manage suppliers performance. Another key task is to develop
the purchasing organizational structure and its governance procedures. Therefore, the supply strategy involves
spend analysis, demand management, specifications, category and supplier management,
contract management, cost management, purchasing process, and supplier relationship
management. Thanks for watching, see you in the next lesson

Comments (2)

  1. Great series of videos

  2. Good keep doing these videos. They are great

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