Consulting

The importance of procurement in relation to achieving strategic goals of the company cannot be overestimated. Price of purchased materials, their quality and on-time delivery are the factors that undoubtedly influence the financial results of the business in the end.  

A growing number of large businesses realize that it is important and necessary to make procurement more efficient. Procurement consulting is one of our main work areas.

We single out these typical problems that exist in procurement management in a big company:

• Unsatisfactory percent of purchase order fulfillment;
• Main departments stand idle (short-received profit);
• Main departments complain about supplies;
• Both shortage of required inventory and excessive stock (frozen assets);
• Big volume of unmarketable assets;
• Poor condition of directory;
• Inefficient procurement control;
• Employees scheme and abuse;
• Inefficient procurement organizational chart (some work functions are overlapping, there is a conflict of interest, poor coordination, etc.).

We are highly experienced in finding solutions to these problems and in optimizing procurement logistics and are ready to render the following services:

1. Audit of procurement system, recommendations to improve the procurement system.

2. Elaboration of a concept for strategic development of procurement logistics.

3. Designing organizational structure of procurement logistics to meet company targets.

4. Elaboration and implementation of business processes in accordance with the strategy for procurement logistics development (includes making up of all required documents such as procedures, job descriptions, orders, decrees, techniques, etc.).

5. Carrying out ABC-XYZ analysis of purchased inventory. Dividing procurement to levels (single-sourcing of expensive and fast-moving stock to get best prices, to reduce delivery costs and lead time. Purchase of cheaper inventory bypassing the procurement department – reduction of inventory procurement costs, etc.).

6. Finding the best price formation for commodities (the efforts to obtain the best commercial offers will be focused on the most important inventory bringing the maximum effects).

7. Finding the best purchasing method for commodity (an auction, electronic trading, comparison chart, etc.).

8. Elaboration of requirements, selection and implementation of the most efficient information system.

9. Elaboration and implementation of key efficiency factor system to evaluate the procurement.

10. Supplier relationship management:

• Making an analysis of the current supplier pool. Ranking the suppliers on the basis of their value to the company;
• Making recommendations to improve the supplier relationship (informational integration, finding common standards, etc.);

11. Making and implementation of a concept to make inventory directory more efficient:

• Setting up the guidelines for classification and a breakdown of the stock-list;
• Finding methods to create and update the stock directory;
• Directory cleanup (deleting repeated positions);
• Reduction of business dependency on exclusive stock (substituting exclusive inventory for cheaper inventory with similar characteristics and quality).

12. Development and implementation of solutions to sell and distribute unmarketable assets. Sale of unmarketable assets within the company or to third buyers:

• Setting up the procedure to single out unmarketable inventory;
• Finding unmarketable inventory;
• Designing a structure to sell unmarketable assets;
• Random inventory checks to appraise the physical and functional depreciation of unmarketable inventory;
• Selling unmarketable assets within the company (including the unmarketables discovered into the bidding campaign);
• Setting up sales of unmarketable assets to external buyers (defining price formation principles and ways to sell inventory).

13. Setting up a System for Monitoring and Immediate Response to Failures (MIRF):

• To single out and systemize problems in procurement;
• To elaborate solutions;
• To control implementation of decisions taken.

14. Regulation of inventory acceptance in procurement (to focus acceptance inspection on various commodities, setting up control and its frequency, finding methods and techniques, etc.).

15. Regulation of security system activities for procurement (finding objects to inspect, types, frequency and reasons for inspection, making the list of documents to be checked, etc).

16. Analysis, theory and implementation of centralized supplies. 

We can help you organize your procurement efficiently. 

Refinement of procurement will lead to these improvements:

1. The procurement department will decrease in staff to 30 percent.
2. Procurement costs will decrease (the processes will be reorganized, overlapping business processes will be eliminated, procurement will be centralized) to 30 percent.
3. Delivery period will decrease to 15 percent approx.
4. Saving 2.5 percent of procurement costs.
5. Up to 10 percent of procurement costs will be saved through redistribution of unmarketable assets.