Eskom Procurement Book 2015

PROCUREMENT AS A SUPPORT AND STRATEGIC FUNCTION WITHIN COMPANIES

Planning process (S&OP). This identifies the levels of sales, product mix and required production levels to meet these sales levels, typically over a one year planning horizon. Procurement’s strategies and plans must align with the sales and operations plan. For example, procurement must know what components are required by production as well what services are required for production to fulfil customers’ requirements. These components could include sub-assemblies, information technology, packaging materials and so on. Procurement is responsible for sourcing the inputs needed to support operations’ plans and must, therefore, work with operations to execute these plans. Close and continuous communication and contact between procurement and operations is required to accomplish this and, in some instances, these departments are co-located [9]. The procurement and quality assurance functions go hand in hand. Most firms source a large percentage of goods and services externally and must rely heavily on the quality of these goods and services. To ensure that suppliers perform as expected, the procurement and quality groups within a firm need to work closely together. Joint projects between quality and procurement include, for example, quality training for suppliers, process capability studies, quality engineering and corrective action planning. In some firms the responsibility for supplier quality planning resides within the procurement group [9]. One of the most important links in a firm is between procurement and engineering. Procurement and engineering typically work together on projects with suppliers and collaborate on supplier selection and/or product development projects. In some cases firms employ commodity managers with technical backgrounds suited to the types of engineered products and services being procured. An example of this is a major package delivery firm that has its vehicles and their components engineered to its own specifications to ensure exceptionally high levels of reliability and durability. This firm employs a group of procurement professionals who have a high level of engineering experience. They work closely with the firm’s internal engineering group and strategic suppliers to engineer and/or re-engineer automotive-related components and products. Engineering typically looks to procurement to perform certain tasks to support its work. This includes, for example, procurement being tasked with identifying the most technically capable supplier/s for an item or ensuring that suppliers meet engineering’s quality and delivery targets. Also, engineering works with procurement to help assess a given supplier’s production capabilities, to involve procurement early on in the design process and, in working with suppliers, to encourage them to develop innovative ideas. Procurement also works with

4.6.3.2 Quality Assurance

4.6.3.3 Engineering

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