WHY SHOULDN’T YOUR BUSINESS BENEFIT

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1、WHYSHOULDN’TYOURBUSINESSBENEFITFROMBESTPRACTICEBUYING?ByMatthewRoper,FounderandMD,BuyingSupportAgencyPurchasingbestpracticedeliversprofitgrowthWouldyoutakeapileoftenpoundnotesandsetfiretothem?Ithoughtnot.Yetthatisexactlywhatanawfullotofbusinessesdoin

2、thewaytheyapproachtheirpurchasing.Apartfromsalaries,thebiggestareaofexpenseformostbusinessesispurchasing.Inourexperience,asharpenedfocusonbuyingcanreduceabusiness’scostsbyasmuchas20%.Whatwouldbetheimpactonyourbusinessofevena10%savingonyourtotalpurcha

3、sebill?Alltoooftenpurchasingistreatedasthepoorrelationcomparedwithotherfunctionswithinabusiness.Yet,apartfromsales,nootherareaofabusinesshassomuchpotentialtoimpactonthebottomline.Everypoundsavedbybetterbuyingisapoundofadditionalprofit.Anditgoesfurthe

4、rthanthat.Morevalueandimprovedinnovationfromyoursuppliersequatetoasuperiorpropositionforyourcustomers.Sobetterbuyingcandeliverbothlowertotalcostandimprovedrevenues.Youignoreyourorganisation’spurchasingfunctionatyourperil.Takeafewmomentstoseehowyourbu

5、sinessmeasuresup.Reviewourchecklistandseewhetheryoucansay,withyourhandonyourheart,thatyoureallyhaveahandleonyourbuyingactivities.Tell-talesignsthatyourpurchasingfunctionisnotperforming:*Noreliabledata.Yoursystemscannottellyouclearlyandsimplyhowmuchmo

6、neyisbeingspentinwhichcategoryofexpenditure,howmanysuppliersarebeingusedforeachcategory,andhowandwhyeachsupplierisused.Thisappliesnotjusttosnapshotsinmonthlyreporting,buttotrendsovertime.*Noregularreviewofpurchasing.Purchasingjusthappens,monthin,mont

7、hout.There’snoregularbenchmarkingofneworexistingsupplierstodeterminewhetheryouaregettingfairvalue.*Toomanysuppliersinthewrongareas.Thewrongareasarelowvalue-addedpurchases–likeofficestationery-whichareessentialforthebusinesstofunction,butconfernostrat

8、egicbenefit.Dealingwithtoomanylow-valuesupplierswastesyourstaff’stimeanddivertstheirattentionfromtheimportantpurchasingareas.Andyou’realmostcertainlypayingtoomuch,becauseyourbuyingpowerisdissipated.*Toofewsuppliersintherightareas.Therightareasarehigh