Eskom Procurement Book 2015

PROCUREMENT AS A SUPPORT AND STRATEGIC FUNCTION WITHIN COMPANIES

product, and other factors. E-sourcing applications, however, provide tools that let businesses organise and compare supplier information more effectively [7].

4.6 PROCUREMENT AS A SUPPORT FUNCTION Procurement plays a vital role in helping to ensure continuity of supply, in reducing costs, in sourcing from the most appropriate suppliers and so on. However, procurement cannot accomplish these tasks without a close working relationship with other functions within a firm, including, for example, engineering, marketing, maintenance, distribution and manufacturing. In other words, it must have a close working relationship with the users of the products and services that procurement obtains. Procurement, ideally, should also work with top management in a firm to ensure that the procurement strategy is aligned with and supports organisational strategy and objectives (as outlined earlier in the chapter). In this section we outline the important role that procurement plays as a support function under the following headings:

• The team approach to procurement. • Integrating procurement in the supply chain.

• Procurement’s internal linkages. • Procurement’s external linkages.

4.6.1 THE TEAM APPROACH TO PROCUREMENT

Driven by pressures to reduce costs and improve the bottom line in today’s cost- conscious marketplace, purchasing/supply departments have, like most other functions, sought ways to streamline operations and improve efficiency. One of the approaches that has enhanced the effectiveness of the purchasing/supply management function is the use of teams.  Organisations seek to combine the flexibility of decentralised purchasing and the buying power and information sharing of centralised purchasing through the use of teams. Various types of purchasing and supply management teams are used, including cross-functional teams, teams with suppliers, teams with customers, teams with both suppliers and customers, supplier councils (key suppliers), purchasing councils, commodity management teams and consortiums (pool buying with other firms) [8]. Cross-functional sourcing teams often consist of personnel from various functions brought together to achieve a purchasing or material-related task in which the team must consider purchasing/sourcing goals or decisions involving supply base management. Frequently, you find staff from purchasing, finance, engineering and legal functions forming part of such sourcing teams. Table 4.2 provides examples of groups and teams in supply management.

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