Purchasing and Procurement
Are you taking full advantage of all the potentials hidden in purchasing and procurement? We can help you identify and tap into them.
The processes in purchasing and procurement represent a very large lever for optimization all along the value chain, and their importance is growing in the current climate of global sourcing possibilities and the resulting price competition. In many cases, the potentials hidden within purchasing and procurement are underestimated due to a lack of transparency and inadequate total cost of ownership (TCO) analyses, and companies settle for rapid quick wins.
The growing trend in industry of shifting the responsibility for production and other value-creation steps over to suppliers gives rise to the situation that the share of purchasing volume in relation to company turnover is rising continuously – it is not uncommon today for this to be more than 50%. Hence, it is becoming increasingly important to control costs and to ensure seamless provision of goods and materials. Permanent, rigorous observation and, if required, optimization of the relevant control variables in procurement can lead to the creation of significant value. At the same time, it is important to incorporate potential risks into the decision-making process.
Designing more efficient processes in procurement supported by suitable IT systems is also no longer just a unimportant byline for service providers and institutions, it is now an absolute must for maintaining competitiveness.
The Horváth & Partners approach is to derive the strategy for purchasing from overall corporate strategy and break it down into specific targets, processes and organizational structures for the departments.
In order to secure the greatest impact for implementation, it is important to factor the current developments on the global sourcing markets into your considerations, e.g.:
- Risk management in the sourcing chain (incl. supply and price risks, international risks)
- Global sourcing / outsourcing and global benchmarking (low-cost country sourcing, outsourcing of process steps to suppliers)
- Procurement from compliance aspects and “green procurement” (increasing demands for ethical and environmentally friendly purchasing and for the fight against corruption)
- Long-term value sourcing (supplier partnerships aimed at joining forces to achieve success in purchasing, e.g. in terms of development partnerships, design to cost, etc.)
The emphasis of our work here at Horváth & Partners lies on working in close cooperation with our clients to develop and implement bespoke solutions in the field of purchasing and procurement in order to achieve sustainability.