Eskom Procurement Book 2015

PURCHASING ANALYSIS TOOLS AND TECHNIQUES

analysis, we learned, is the organised and systematic study of every element of cost in a part, material, or service to make certain it fulfills its function at the lowest possible cost. Value analysis also employs techniques that identify the functions the user wants from a product or service. In this regard value analysis comprises a particularly useful set of tools and techniques for use in the procurement field. These days, business professionals of all kinds, including professionals within the procurement function, deal with significant pressures from above and below as their organisations try to increase their competitiveness by streamlining processes and reducing costs. Every process and activity is being scrutinised to ensure that it makes a positive contribution to the value of the organisation. Procurement professionals may be asked to help establish pricing models, contribute information to business-case analyses, or identify and eliminate Non- Value-Added (NVA) activities within a programme area. Available expertise may not lie in business analysis, and ‘Process-mapping’ can help. Finally, procurement professionals will be tasked with procuring products and services that may take the form of a rebuy, a modified rebuy or the procurement of a new product or service. In doing so, procurement professionals need to know what it costs to run a competitive procurement process/event and manage the resulting contract(s). Project managers need to know what it costs to undertake and complete a project. Project management tools and techniques can greatly enhance the ability of procurement professionals to undertake procurement processes/events and help to ensure that these processes/events are carried out in a timely and cost-effective manner. Cavinato J.L. and Kaufman R.G. (eds), Value analysis, In: The purchasing handbook: A guide for the purchasing and supply professional, 6 th ed., New York, McGraw-Hill Publishing, 2000, Chapter 24, pp. 585-605. [2] Lewis J.P., An overview of project management, In: Fundamentals of project management, 10 th ed., New York, AMACON, 1997, Chapter 1, pp. 1-3. [3] Lewis J.P., A general approach to project planning, In: Fundamentals of project management, 10 th ed., New York, AMACON, 1997, Chapter 2, pg. 23. [4] Lewis J.P., Scheduling project work, In: Fundamentals of project management, 10 th ed., New York, AMACON, 1997, Chapter 5, pp. 50-58. [5] Lewis J.P., Scheduling computations, In: Fundamentals of project management, 10 th ed., New York, AMACON, 1997, Chapter 6, pg. 60.

8.9 REFERENCES [1]

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