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More executives are recognizing procurement's role in achieving operational excellence objectives and increasing shareholder value. To deliver on that promise, procurement professionals must study what their colleagues in other companies and industries have done to find and implement best practices that can work for their organization. Procurement benchmarking offers guidelines and analysis that can help evaluate internal process efficiencies and target resources where it will have the greatest impact.
APQC, an internationally recognized nonprofit research organization, is offering you the opportunity to benchmark your procurement processes at no cost.
Procurement Realities: Never before in history have goods, capital, and information flowed so freely across international boundaries. Never before have potential sources of products and components been so plentiful. For more than the past decade, procurement professionals have been actively seeking out and cultivating new suppliers in low-cost regions (China chief among them) that can offer comparable quality at lower price points (including the total landed cost to their primary markets).
Other responsibilities of procurement and purchasing departments include ordering materials and services, tracking quotations, creating purchase orders, certifying and validating suppliers, negotiating contracts, and collaborating with suppliers to identify cost savings opportunities.
Looking forward, many procurement departments have gone as far as they can go when it comes to leveraging price savings out of suppliers. Progressive organizations are figuring out other ways for procurement to become a core competitive weapon and contribute to increased shareholder value.
The following metrics for world-class procurement, aided by benchmarking, would offer a competitive edge:
1. Reduce the total value of purchased materials and services as a percentage of revenue
2. Reduce total cost of ownership (vs. initial spend)
3. Reduce supplier cycle time
4. Improve internal customer satisfaction
5. Reduce maverick buying
6. Reduce procurement costs per purchase order
7. Improve supplier on-time delivery rates
8. Improve incoming material quality and reduce damaged shipments
9. Increase automatic replenishment/ vendor managed inventory.
Again, there is no cost to participate in this procurement research, and in return for submitting your data, you will receive a customized report that includes an overview of the metrics and practices at top-performing organizations.
Visit: www.apqc.org/sc/pro/scb and start benchmarking your performance today!
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