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Strategic purchasing

Strategic purchasing
by Florian Geiger

Strategic purchasing for long-term success

Purchasing is responsible for 50-80% of external value added, depending on the industry. Therefore, the Strategic Purchasing plays a key role for the company’s success. This high influence of the purchasing organization on the company’s success is increasingly recognized within companies.

Whereas in the past the procurement department was solely responsible for supplying the company with goods and services from outside, modern purchasing is continuing today: Strategic purchasing has meanwhile become a central function within the company, which contributes significantly to the overall success. The regular, forward-looking and potential-exhaustive analysis of your own purchasing organization is therefore a must for successful strategic purchasing. Based on this, a competitive purchasing strategy can be developed with which not inconsiderable cost savings can be achieved.

Strategic purchasing is more than procurement

As a management consultancy, we support you in making your purchasing more efficient with tailor-made methods. We see procurement as a strategic management task and advise you individually, for example

  • the development of a purchasing strategy
  • the control of material costs
  • the procurement market research
  • the management of your suppliers
  • the use of synergies
  • the standardization of your purchasing portfolio
  • the construction of an effective purchasing controlling
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Strategic purchasing tailored

Together with your Strategic Purchasing we develop a tailor-made purchasing strategy and increase the efficiency of your procurement significantly.

With our Procurement Scan concept, for example, we offer you an effective short project in which we systematically analyze and evaluate the performance of your purchase. The results serve the (further) development of your strategic purchasing. We include internal facts, external benchmarks and assessments of your employees into our rating. In the development and implementation of measures to strengthen your purchasing organization we support you.

In particular, our tailor-made concept of material cost management, which goes far beyond the mere optimization of material costs, is a strategic management tool for purchasing. Using the material cost cuboid, we can clearly illustrate various levers for optimizing material costs. Together with our customers, the TARGUS experts work out targeted solutions and, upon request, also accompany the implementation and implementation.

Strategic purchasing is a management task

The upgrading of the purchasing function is of particular importance for the success of strategic purchasing. Only through strategic action can significant cost advantages be achieved for the entire company. In order to be able to actually use untapped potential, it is often necessary to upgrade the role of the purchaser. Particularly meaningful is the direct integration of strategic purchasing into company management, e.g. at the same time the purchasing manager is a member of the management or at least reports directly to them. In this way, corporate planning and purchasing goals can be better linked, target conflicts with other areas avoided, and more flexible responses to new developments in the market.

Strategic Purchasing comprises a supplier and material strategy tailored to the company’s goals. Both should be the result of interdisciplinary cooperation between all affected departments of the company. To do this, Strategic Purchasing must already be involved in product development. Exact analyzes allow materials to be procured cost-optimally or product properties to be adapted that release considerable savings potential. Since these are often long-term measures, a coordinated interdisciplinary approach with common cost targets in strategic purchasing is particularly important.

Not only the price decides

The price has many influencing factors such as material, quantity, specification, product design, logistics or purchasing and delivery conditions. It is important to identify and evaluate all potential savings along the value chain and to consider them in strategic purchasing planning. By pooling purchasing power and targeted supplier management, further cost and quality optimization can be achieved.

Build competitive advantages in purchasing

In addition to its own purchasing organization, Strategic Purchasing should also consider external factors such as benchmarks or the positioning of purchasing on the competitive side. Special attention should also be paid to innovations from current and potential suppliers, as Strategic Purchasing is not just about optimal contract and condition management. In many cases, especially in the capital goods sector, a close cooperation between Strategic Purchasing and the suppliers enables the development of individual solutions that offer a win-win situation for both sides and open up significant competitive advantages or new market segments for the company. The TARGUS purchasing experts help you develop common scenarios with your suppliers and achieve effective results.

Controlling with meaningful key figures

Due to the internationalization and globalization of purchasing and production, the reduction of inventories, the optimization of production processes and the increased purchase of third-party services, the role of purchasing has become increasingly important for the company’s overall success. Strategic Purchasing therefore does not consider analysis and planning processes alone, but should also include effective controlling. Essential here is the development and consistent use of meaningful key figures. Together with your purchasing team, our consultants will develop suitable key figures for your purchasing that, on the one hand, reflect the profit contribution and the efficiency of your purchasing organization and, on the other hand, enable the assessment of your suppliers.

Delimitation is the strategic purchasing of the operational purchasing function, which is responsible for the actual procurement of goods based on the strategic planning data. If necessary, we also support the reorganization of your purchasing and the integration of the strategic and operative unit into the overall organization of your company.