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GENERAL Organizations and companies have suppliers, suppliers have clients. The relationship between client and supplier is very important with respect to profitability and continuity of both client and supplier. It is our experience that many companies (clients and suppliers) face risks because they are not aware of the power position of their counterpart. Therefore you should evaluate your client, supplier and partnership relationship regularly. Efficient procurement is the basis for high profitability. The effect of more efficient procurement can be easily calculated with the Dupont Procurement chart. More info
BA2C Europe can assist your organization in setting-up efficient procurement processes and define and execute strategic outsourcing and/or insourcing. |
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BA2C Europe Lange Poten 29 2511 CM The Hague The Netherlands Email: info@ba2c.com Phone: +31 70 360 50 80 Cel: +31 6 483 53 263 Internet: www.ba2c.com
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CLIENT - SUPPLIER RELATIONSHIP To evaluate if a activity can best be executed in-house, in a partnership, outsourced or be procured can be investigated with the Kraljic procurement portfolio analysis. This evaluation helps you to position the strength and power of both client and supplier towards each other:
When you understand the procurement power of your company you can develop a procurement and/or outsourcing strategy. The four general basis strategies for procurement are: - Strategic co-operation; - Competitive bidding; - Securing supply and delivery; - E-procurement solutions. More information regarding Client-Supplier relationships will be provided soon on this page soon. |
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STRATEGIC PROCUREMENT DECISIONS Based on your companies procurement position top-management in your organization can make strategic procurement decisions like: - Define policy regarding Make or Buy; - Decide which activities should/could be integrated/insourced in the organization and which activities should/could be outsourced; - Policy regarding inter-company purchases and supplier compensation purchases; - Developing and implementing procurement policies, procedures, task descriptions and standards; - Development and implementation of audit and review programs; - Agreements and decisions regarding multi-year contracts with suppliers, development of partnerships or reducing/increasing the number of suppliers; - Procure capital intensive investment materials. As a result of these decisions your organization has to define and implement (new) procurement activities and/or start-up the process to outsource and/or insource certain activities. |
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TACTICAL & OPERATIONAL PROCUREMENT Based on the decisions made during the strategic procurement phase your organization might have to implement professional procurement. We divide the actions to implement procurement in tactical and operational procurement. Tactical Procurement Decisions: - Select suppliers and sign procurement contracts; - Execution of value analysis programs together with supplier; - Certification of suppliers; - Analysis and evaluation of (potential) suppliers; - Training of procurement personnel; Operational Procurement: - Manage and execute orders; - Control the ordering process; - Daily relationship with supplier and user of goods and services; - Troubleshoot and solve situations with supplier and/or user of goods and services. Efficient procurement has a major impact on the profitability of your company. You can calculate the effects of improved procurement with the Dupont Procurement chart. |
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INSOURCING & OUTSOURCING OF ACTIVITIES Outsourcing to other specialized companies or companies in low-cost countries might be the strategy for your company to reduce cost and improve profitability. However there are also many situations where outsourcing activities have been a failure and resulted in high losses, even bankruptcy. Therefore you should analyze your companies situation before starting to outsource activities to another company. Main characteristics of outsourcing: - Activities that were executed in-house are transferred to a third party; - Company sources (in some case including employees) are transferred to a third party; - During a long time (contract duration) there will be an intensive relationship between your organization and the outsourcing parties involved; - While transferring the activity to a third party the company faces a new cost and risk profile. More info |
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PROCUREMENT, OUTSOURCING & INSOURCING SERVICE OFFERINGS - Analysis/evaluation regarding your position and strength towards your counterparts (clients/suppliers); - Evaluation the benefits of efficient procurement processes; - Analysis how your adapt your procurement process to improve efficiency and profitability and reduce your risk profile; - Develop and implement new procurement processes and train your procurement personnel; - Execute a feasibility study to outsource/insource activities to other companies; - Develop, arrange and implement new outsourcing and insourcing activities with third parties. |
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