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Roles of Procurement

Presentation by

Aayush ThakralAhana ChakravaryAbhinav SharmaAshish BankaAnshuman ChoudhuryBhuvan Maru

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Traditional belief about procurement:-

Procurements primary role is to obtaingoods and services in response to internalneeds

Procurement has a far more important role

Integral part of a company strategy

Introduction

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Support operational RequirementsManage the Purchasing process efficiently

and effectively

Supply base managementDevelop strong relationship with otherfunctional groups

Support Organizational goals & objectives

Develop integrated purchasing strategies

Roles of procurement

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Roles interchangeably used with PurchasingUnderstand business requirementsBuy products and services

At the right price From the right source At the right specification that meets users needs In the right quantity For delivery at the right timeTo the right internal customer

Support OperationalRequirements

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Internal customers of purchasing include:o Manufacturingo Physical distribution centerso

Engineering and technical groupso Research and developmento Information technologyoTransportation and other services

Support OperationalRequirements (Cont.)

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Management of thePurchase Process

Purchasing must manage its internaloperations efficiently and effectively.

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How it can be achieved

Leadership of procurement for theorganization

Ownership and accountability for sourcingprocesses

Communication of purpose, process and payoff

Collaboration and partnering

Teamwork

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Supply BaseManagementIt is a process involving the selection,

maintenance and development of supplier.Supply base management is the art of

getting the most out of suppliers byproviding insights into supplier selection,

oversight and development.Results in reduction in cost and strong

supplier relationships

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Functions of Supply BaseManagement

To ensure that current suppliers arecompetitive.Identify new suppliers who has the potential

for excellence performance and develop

close relationship with these suppliers.Improve and develop existing suppliers who

are not competitive

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Develop strong relationship with otherfunctional groups

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Procurement objectives should be aligned toorganizational goals

It should not function as a separate entityTimely evaluation of governance structure

fora) Balanced decision making

b) Transparency

Governance should be designed such that itensures timely flow of information

Organizational Goals andObjectives

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Effective purchasing strategies involve: Monitoring supply markets and trends (e.g.,

material price increases, shortages, changes insuppliers) and interpreting the impact of these

trends on company strategies Identifying the critical materials and services

required to support company strategies in keyperformance areas, particularly during newproduct development

Developing supply options and contingencyplans that support company plans

Supporting the organizations need for a diverseand globally competitive supply base

Role: Develop integratedpurchasing strategies