Eskom Procurement Book 2015

PROCUREMENT AS A SUPPORT AND STRATEGIC FUNCTION WITHIN COMPANIES

4.7.1 BEST PRACTICE EXAMPLES

The following examples of best practices in procurement illustrate how procurement creates organisational value.

4.7.1.1 Integrating Marketing and Sourcing

A leading global company is applying its sourcing leadership to marketing strategy development and execution. Specifically, a sourcing manager has been assigned to marketing and promotion strategy teams to support their efforts when developing contracts. Examples of areas where the marketing team requires contract support include printing services, conventions, meetings, promotional displays and tradeshows, marketing research services and advertising and promotion. Sourcing involvement, for example, resulted in a reduction of company-wide printing suppliers from 600 to five. The sourcing professional adds value to the marketing and promotion process in a number of areas. The sourcing manager and her staff: • Verify that every unit within the corporation is charged the same and best rate from suppliers. • Attend marketing and promotion strategy team meetings. • Reserve the right to audit advertising ‘job jackets’ and costs. • Work to gain most favoured customer status with media suppliers. • Control the process of buying advertising and media support. • Maintain confidentiality through control of the buying process. • Work to retain the company’s ownership of intellectual property. • Assume a major part of the contracting process that marketing simply does not want. The direct involvement of the operations and technical groups within marketing has become a critical objective for this global company. The corporate marketing group is organised into four business segments. Consistent with this company’s new market-based focus, increasing numbers of new product ideas are originating from marketing rather than the traditional avenue of Research and Development (R&D). Marketing is now responsible for market testing the ideas generated by R&D. Operations and technical representatives, who report to the vice-president of new product delivery, are assigned to each marketing category. These individuals act as liaisons with marketing to ensure that operations and technical voices are represented and considered when new product ideas are generated. Participation with marketing ensures that operations and technology groups have early insight into new product requirements and can convey these requirements back to their functional groups.

4.7.1.2 Co-locating with Internal Supply Chain Members.

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