Strategic Purchasing

Purchasing is the company function that has faced the most dramatic changes in task and management expectations during the last decades. In many companies it was a support function for in-house production with low financial effect but large impact on the ability to keep up the production. Hence the most focus was on material supply and the function was often organised within production.

During the business transformation where companies move up the value chain and own production in many cases is outsourced (to someone else that is also moving up the value chain), the purchasing value becomes a larger and larger part of the company turnover. This dramatically increases the financial impact of the purchasing performance. Low cost but also efficient supplier co-operations in order to quickly adapt to new marked demands and benefit from the supplier expertise becomes company strategic issues. As the company's quality image on the market is more and more depending on it's suppliers performance, an efficient supplier quality management function is also vital for success.

This has today lead to that purchasing is the function that can be found in most different places in the organisation and with most different responsibilities. When onTrack talks about purchasing and strategic purchasing we mean the function that has the task to find suppliers, optimising the purchasing cost, securing material quality and represent the suppliers within the company. It is also purchasing that is the natural part in the strategic supply decisions by providing the information about a "buy-alternative" when evaluating or re-evaluating buy-or-make alternatives.

onTrack has an extensive experience in strategic purchasing and for the basic internal purchasing issues such as how to organise the department, strategy, purchaser introductory education and training, negotiations, how to set up a request for quotation, supplier evaluation, category management etc - in short the professional purchasing issues. We also co-operate with pure purchasing consultants.

As we focus on the cross functional product cost optimisation we normally either discuss purchasing as a function within the company's product cost optimisation process or assist the purchasers in, or manage specific cases as part of a product cost reduction project.

A typical sourcing or re-sourcing project: