Eskom Procurement Book 2015

PURCHASING ANALYSIS TOOLS AND TECHNIQUES

SYNOPSIS All professions have developed tools and techniques to help those who operate within those professions to do their job effectively. The procurement management profession is no different and can benefit from the use of these tools and techniques This chapter covers the key tools and techniques that can be used to enhance the purchasing process and ensure that this process is carried out efficiently and effectively. The chapter introduces the following topics:

• Value analysis. • Process mapping. • Project management.

8.1 INTRODUCTION There are several tools and techniques that can be used to evaluate how to accomplish the work carried out within procurement most productively. Some of these have been covered in previous chapters. In this chapter we cover three important groups of tools and techniques used in improving and managing procurement processes, namely value analysis, process mapping tools and techniques and project management tools and techniques. Value analysis is an approach to improving the value of an item or process by understanding its constituent components and their associated costs. It then seeks to find improvements to the components by either reducing their cost or increasing the value of the functions. Value analysis is used to determine and improve the value of a product or process by first understanding the functions of the item and their value, then its constituent components and their associated costs, in order to reduce their costs or increase the functions value. Business process mapping refers to activities involved in defining what a business entity does, who is responsible, to what standard a business process should be completed, and how the success of a business process can be determined. The main purpose behind business process mapping is to assist organisations in becoming more efficient. A clear and detailed business process map or diagram provides a means for assessing where improvements can be made to a current process. Project management is the application of knowledge, skills and a group of specific tools and techniques to execute projects effectively and efficiently. It is a strategic competency for organisations, enabling them to tie project results to business goals and thus better compete in their markets. Project management tools and techniques are used to help ensure that projects are completed on time, on budget and to acceptable levels of quality.

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