We live in a world that is free. The pinnacle of this example is how we have a free market economy. The economy operates under the principles of supply and demand, where businesses compete for consumer patronage with “diverse” offerings of various goods and services priced competitively and attractively. This competition encourages businesses to scale their efforts to make their offerings unique and valuable, so that they can attract customers and stand out from their competitors. The greater the diversity of products and services available to consumers, the better the market.  Additional ..read more

What are the core responsibilities? Buyers, purchasing agents, procurement specialists, purchase executives, irrespective of how they are referred to in an organization, are primarily responsible for purchasing materials, supplies or equipment for a business. Their roles & responsibilities include: Identifying the right suppliers Negotiating with them for best price and quality Processing requisitions and purchase orders and tracking their status Working with internal teams such as design, quality, and stock teams to ensure parts are received as planned Here, it is important to note that ..read more

A majority of the manufacturing companies still use ERP for Sourcing & Procurement. Managing Procurement in ERP is primarily about order management. All of the pre-purchase order or sourcing activities, in other words, all of the strategic decisions and actions are not accounted for in ERP. ERP is one of the most important systems an organization has as it is the central source of information; diverse business units within a company operate off the same data set. It drives operational efficiency and manages processes and finances globally. That said, ERP is not suitable for a process like ..read more

Supplier Relationship Management is a phrase that has been seeing a lot of traction of late. Companies have realized the criticality of suppliers being a stakeholder in their success and have been taking several actions to improve communication and collaboration with their suppliers. Unfortunately, when buyers and the entire buyer organization is under pressure from downstream activities, market forces and economic factors in meeting challenging targets, it has a ripple effect on suppliers too. To top it all, a lack of communication or miscommunication between the buyer and their suppliers can ..read more

In Product Manufacturing companies, the role Sourcing & Procurement teams play is critical in the success of a product. However, most companies do not fully understand the impact of these roles. And because of this, the siloed approach, distrust between functions and a lack of consensus for collective improvement continues. On the other hand, when there is a strong synergy between the procurement and product development functions, the agility and success of the product development process and the control of their Time-to-Market is quite exciting to watch. A general overview of the product ..read more

Procurement or purchasing is an essential part of any business. No business can function without employing the services of another entity to complete their full business cycle. That said, the nature of the goods and services procured are different based on the nature of the business. For example, a farmer would procure seeds from a seed vendor. The seeds directly go into growing their crops. On the other hand, an accountant would procure papers and pens that are used in doing their job but not directly part of the output. Based on this distinction, goods and services that are procured to go in ..read more

They say that a pioneer is one who sees, believes in, and acts upon an opportunity that others fail to see or believe in; or lack the energy or courage to pursue. From our vantage point, we clearly see how this plays out in the real world, in the context of our software product, dealing with the heads of Procurement, Chief Procurement Officers, and heads of Strategic Sourcing. And how these brave and forward-looking professionals are transforming their functions within their organizations, their professional world, and the IT industry catering to their profession. In a way, they are pioneers i ..read more

To the CFO/CIO We know from experience that the delivery of goods and services is required to be balanced within the boundaries of Time-Cost-Quality for the overall success of the organization. Especially when dealing with thousands of parts, organizations are required to manage the Time-Cost-Quality of every item consistently and repeatedly. And we also know that there is a reason TCQ is a universally relevant framework for product manufacturing companies. All products are built to solve a problem or deliver some value. The TCQ framework ensures that the product is delivered at the right time ..read more

To the CFO/CIO Raw Materials are one of the basic ingredients in the running of a manufacturing organization. The conversion of raw materials from their ‘raw’ form to manufactured parts and components constitutes a significant portion of the spending in manufacturing organizations. Some estimates indicate that up to 70% of the total revenue in manufacturing organizations are ‘spent’ on the Cost of Goods Sold (COGS). The reality is that, in many product manufacturing companies, this could be a higher number. Sometimes as much as up to 85%. COGS comprises several cost components including materi ..read more

To the CFO/CIO: Direct Spend accounts for up to 70% of the total revenue. Yet, it’s difficult to find the audit trail of direct-spend-related decisions. Have you wondered how and where the decisions are made and documented?     In the Procurement/Purchasing life cycle,  most of the decisions on which supplier to work with and at what cost a contract is made are taken before a product is introduced into the market—This phase is called New Product Development (NPD) and continues for several months to a few years depending on the complexity of the product. During this time, t ..read more