From time to time, all businesses have a need for change, big or small. In the Purchasing Department it is often the appointment of a new manager, cost-saving demands or the energy from a change management project that triggers this change. We need to harness this energy and channel it in the right direction.
The purpose of a transformation project is often to promote the purchasing organisation as the strategic part of the business it should be. Every penny saved can be seen directly on the company’s bottom line, improving the understanding of the work done by the purchasing department. The opinion changes to that of a Purchasing Department, as a support function which works effectively and professionally, which meets the stakeholders’ needs and get products or services at the best commercial conditions, with secure delivery and with an appreciation of resulting business risk.
How do we manage Transformation Projects?
A change journey begins with a feasibility study and purchasing value analysis, while reporting this to the appropriate personnel. Asking questions on the present and the future lays the foundation for a future strategy. At this point a make-or-buy evaluation is conducted, comparing internal manufacture with the purchase of semi-finished or finished products, outsourcing manufacture entirely and purchases from low-cost countries. Vendor strategies and new approaches emerge, often with a clearer policy in areas of purchasing spend priority. Thereafter, the service provided by the purchasing department to its customers delivers a new and improved organization.
Purchasing policies and processes can be developed to support an effective and consistent way of working and reduce business risk. Sometimes an upgrade of supporting IT systems is required.
Performance measurements should be selected carefully and be well embedded with the relevant personnel. They can then set goals using these measurements to control report their area of responsibility.
The journey of implementing changes in organization, regulations, new work procedures and control systems is an exciting one, that the customer takes with the consultant, their ‘tour guide’. Information flows are charted and adjustments are made, often uncovering new training needs.
A review of the implemented changes often reveals impressive results, in terms of improved customer service, efficiencies, savings and an increase in staff motivation.
Scandinavian Purchasing Group has helped many companies take renewed control of their Purchasing Department’s way of working. We can offer an entire change program, including staff training. Our experience demonstrates that change projects are updating the image of the Purchasing Department, promoting understanding of purchasing work and allowing companies to pursue their purchasing agenda in all economic situations.