This Report is brought in co-operation with Cattan Service ... … · reengineering or change management efforts that are focused on best practices, benchmarking, balanced scorecards,

This Report is brought in co-operation with Cattan Service Group. Cattan

Service Group, Inc. By Thomas L. Tanel, C.P.M., CTL, CCA, CISCM, President & CEO

And Loran K. Boenig, CIPME, CO & Treasurer ©2009 Cattan Services Group, Inc.

Seven-Star Purchasing: Beyond the World Class Paradigm

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Contact Us for A Free 30 Mins Consultation at [email protected]

INTRODUCTION

This whitepaper describes Seven-Star Purchasing: Beyond the World Class Paradigm, encouraging

purchasing and supply management professionals to move these organizational functions toward

seven critical areas of excellence. Though we recognize that some organizations, including public

sector, governmental agencies, not–for–profit institutions, and non–governmental agencies, are

bound by unique regulatory and legislative requirements, they nevertheless can profit by some of

the approaches proposed here.

BEYOND THE BUZZWORDS AND BACK TO THE BASICS

We have observed a fairly disturbing trend: Many organizations are heavily engaged in

reengineering or change management efforts that are focused on best practices, benchmarking,

balanced scorecards, metrics and KPIs, etc. in order to become agile, customer-relationship-centered,

world class entities. Additionally, many young professionals are learning purchasing based

primarily on the use of their organization’s resident computer systems and software rather than

learning the basics of the purchase process itself. While these may be useful tools, they are no

substitutes for the logical processes and foundational principles they execute. Without knowing

how and why these tools work, the purchasing professional is reduced to wooden puppetry, unable

to respond with the intelligence and self-directed agility needed to cope with today’s challenging

purchasing environment.

Such fad-oriented tools and techniques may be based on good intentions, but they are undoubtedly

of more benefit to the self-labeled gurus, evangelists, masters, and thought leaders who generate and

publicize them. We need to get beyond the buzzwords and back to the basics. In reality, the

purchasing profession, which we call ours, is not a simplistic craft or a job, nor is it grounded on the

latest techno-babble. It is a blend of both art and science. At its best, it is based on fundamental

facts, application of the basics, and good practices rather than on elusive jargon, formulaic processes,

or canned computer software magic. While never losing sight of its foundation, sound purchasing

keeps a skeptical eye on the latest fad, hype, trend, or new practice before implementing it.

In truth, the concepts of structuring supplier relationships, vendor managed inventory, conflict

resolution, risk management, SOW and specification development, teamwork, total cost of

ownership, and cost targeting are not new ideas. Rather than representing a new paradigm, they are

tried-and-true areas of excellence that have long been driving forces in the purchasing and supply

management field. Sometimes, it’s easy to get lost in the intricacies of aiming while losing sight of

the target. In an attempt to move to a ‚world class‛ mode, many companies focus on the

technicalities of achieving the paradigm in lieu of achieving the true goal: to master the basic processes

that will produce excellence in the end result.


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Don’t be fooled. You may be tempted to make the kind of mistake being made by so many

purchasing and supply management professionals today—thinking that the more traditional

purchasing skills they have honed in the past are no longer needed. Ironically, forgetting the basics

can make them more vulnerable to purchasing cut-backs, job attrition, or downsizing efforts in

organizations that increasingly rely on automated systems to do their thinking for them. Even more

ironically, it is not a computerized system or a fancy buzzword but the well-grounded purchasing

professional who has the flexibility to be truly responsive to an ever-evolving supply management

environment.

So let’s get back to rediscovering and perfecting the basics, what we call the Seven-Star Purchasing

Areas of Excellence:

SEVEN-STAR PURCHASING AREAS OF EXCELLENCE

1. Think strategically about how to add value.

2. Encourage training and development of purchasing personnel.

3. Use cost-price analytics and techniques.

4. Develop structured supplier relationships for your commodity/service group.

5. Advance your communication and negotiation skills.

6. Cultivate inbound freight control opportunities.

7. Focus on enhancing the contracting process.


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1. Think strategically about how to add value.

This strategic area includes selling the importance of Purchasing, Procurement, and Supply

Management to the C-level (CEO, COO, CFO) executives responsible for strategy involvement.

If purchasing cannot prove it is adding value to the organization, the function my face

outsourcing or elimination or downsizing. According to the Center for Advanced Purchasing

Studies Report on CEOs’/Presidents’ Perceptions of the Purchasing Function, the problems that

purchasing has to deal with are these:

1. Many firms feel their purchasing and procurement function is not very effective.

2. In the eyes of many CEO’s and presidents, purchasing is not a major contributor in most

business decision making.

It follows that there are two possible reasons why the purchasing and supply management

profession today does not command higher, value-added respect by an organization’s C-level

management:

3. Purchasing is actually not adding much value to the bottom line.

4. The purchasing department is indeed adding value, but it is not communicating it in a

manner readily understood by senior management.

Without knowing what performance measures or metrics to use, how can you help C-level

(CEO, COO, CFO) executives understand how the function is adding value? How do you know

whether you are doing a good job if you don’t know where you began versus where you are

now? Therefore, every purchasing executive should have a set of key metrics or Key

Performance Indicators (KPIs) for their organization.

Each metric or KPI should have pre-established targets, which may be subject to change along

with the performance evaluation needs of the department. Metric or KPI development is an

ongoing process that should be improved continually. It depends heavily on the strategic

information available on your computer system as well as data governance issues such as

enterprise-wide data naming conventions and standards; data quality, availability, timeliness,

latency; and spend management information. Without KPIs or other established metrics, you

will find it challenging to document the data and demonstrate to upper management the

improvements purchasing has made—and can make—to the organization’s bottom line.


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2. Encourage training and development of purchasing personnel.

Purchasing executives must be a combination of talent scout and mentor, with a passion for

seeking out raw talent and developing it into strong, qualified, well trained, functional

personnel. Such development should cover core supply chain content knowledge and process

skills as well as the interpersonal skills needed to operate in a cross-functional team

environment.

As the profession becomes more and more sophisticated and environmental change accelerates,

the need for personal professional development becomes proportionally important. Training

purchasing professionals, however, needs to be ‚smart‛ training—the type of development that

focuses first on making sure professionals are comfortable with the basics before tackling the

esoteric.

There are many avenues for acquiring essential skills: via public seminars offered through trade

associations, universities, or professional seminar providers; through customized corporate in-

house training; and/or through focused topics presented in webinars or e-learning forums. Some

of this training can even build toward certification in specific areas, which enhances your

company’s profile and makes the purchasing professional more indispensible to the

organization.

As a people-oriented function, purchasing professionals need development in these three

primary skill sets:

CCOORREE BBAASSIICC KKNNOOWWLLEEDDGGEE

SSKKIILLLLSS

PPRROOCCEESSSS KKNNOOWWLLEEDDGGEE

SSKKIILLLLSS

IINNTTEERRPPEERRSSOONNAALL

KKNNOOWWLLEEDDGGEE SSKKIILLLLSS

General business acumen Strategic planning Interpersonal relations

Commodity or service

marketplace/supply base

Process redesign, policy and

procedure development

Coaching, counseling, and

mentoring

Solicitation process for

quotes, bids, tenders, etc.

SOW and specification

origination

Team development and

management

Logistic, inventory, and

transportation options

Total landed cost analysis

and measurement

Internal customer focus and

facilitation

Price and financial analysis ‘Should cost’ analytics Problem solving

Terms and conditions Contract writing Written communication

Negotiations Conflict resolution Change advocacy


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Successful purchasing organizations are increasingly aware that they must put an end to ‚silo

buying‛ and begin to form and utilize cross-functional teams. In order to increase coordination,

internal linkages, communication, resource utilization, focus, efficiency, creativity, and overall

effectiveness, cross-functional teams must be trained and developed to assist in guiding the

purchasing process.

Finally, with supply management becoming more complex daily, it’s also important for

professionals to go beyond the scope of their own functional areas—to explore the complete

supply chain and its interrelated components. Training provides a venue for such exploration.


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3. Use cost-price analytics and techniques.

This requires an understanding of the global economy, such as marketplace infrastructures,

supply chain requirements, logistical channels, and total landed costs. Specifically, this area

emphasizes the following factors:

5. The market determines the selling price.

6. Prices fluctuate—both up and down.

7. Prices have a tendency to react faster to upward pressures than to downward pressures.

8. Downward pressures include lack of customers, vigorous competition, and insufficient total

demand.

9. The buyer needs to understand the difference between price and cost.

10. The knowledge of prices and costs is a powerful tool in negotiations when determining what

something ‛should cost.‛

11. The buyer must ensure that the prices offered are fair, reasonable, and affordable.

Purchasing management makes significant contributions to the control of vital organizational

resources, and the quality of these contributions greatly impacts the organization’s financial

condition. Therefore, there should be mutual objectives existing for both finance/accounting and

purchasing/procurement, the goal of which is to optimize organizational operations by:

12. Minimizing costs

13. Maximizing profit or revenue

14. Maximizing the value of the organization

Purchasing and procurement can significantly affect the organization’s ability to control costs

and thereby improve profitability—much more so than you might expect. For example, let’s

assume your organization makes a 5% net profit after taxes. To produce this level of

profitability, let’s compare what it would take for purchasing to produce such results versus the

equivalent profitability generated through marketing or sales:

SSAAVVIINNGGSS TTHHRROOUUGGHH PPUURRCCHHAASSIINNGG EEQQUUAALLSS SSAALLEESS OOFF::

$10,000 $200,000

$100,000 $2,000,000

$1,000,000 $20,000,000

Clearly, effective purchasing can have a profound effect on the bottom line. This often

overlooked source of profitability is ripe for exploration by many companies who have long

emphasized their sales as the primary vehicle for fiscal strength. With the current state of the

economy and its negative ramifications in the marketplace, purchasing’s cost-price analytics

should be employed with even more fervor than ever to eke out elusive profitability.


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Alliances

Partners

Suppliers/Contractors

Vendors

4. Develop structured supplier relationships for your

commodity/service group.

Suppliers play a critical role in the success of an

organization’s operations. However, different

suppliers require different management techniques.

A stratification of the supply base not only

identifies the depth of your relationship with

the supplier but assists purchasing and

supply management in utilizing its

resources effectively during its

management of the supply base.

Normally, most organizations will

categorize the supply base

relationship into four tiers:

These tiers will formally define the level of your relationship with the supplier, determine types

and frequency of formal communications, and outline the overall program management

structure. Here is a description of the 4 tier-based system:

VVEENNDDOORRSS SSUUPPPPLLIIEERRSS OORR

CCOONNTTRRAACCTTOORRSS

PPAARRTTNNEERRSS AALLLLIIAANNCCEESS

Little or no

differentiation in

products or services

Focus on lowest

price

Transactional

business relationship

No contract term

commitment

As needed

Spot-type

purchases

Superior performance

on quality and delivery

Corporately

contracted but non-

exclusive

Specific, available,

off-the-shelf products or

standard type services

Multi-product/service

offering ability

Trust has to be earned

Seeking longer term

relationship; usually

contracting for 6

months to a year

Mutually

advantageous to both

parties

Bounded relationship

Focused interaction

and significant value-

added

Negotiated formula

type pricing

Established level of

trust

Sharing & exchange

of abilities and ideas

Multi-year contract in

place of 1-3 years or

evergreen contract

Mutual dependence

beyond supply &

technology

Unbounded—open

relationship

Broader business

operating arena

Total landed cost

Unique commitments

Joint long-term broad-

based planning for the

most complex of

relationships

Multi-year contract in

place of 4-5+ years

SUPPLY BASE RELATIONSHIP CRITERIA


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To achieve excellence in this area effectively, most organizations have gone through a strategic

sourcing program that allows them to focus on their most important structured supplier

relationships. A good rule of thumb is that approximately 5-20% of your supplier base will

account for 70-85% of your organization’s purchase spend, which accounts for 10-25% of the

materials and services that you procure on an annual basis.

Strategic sourcing is itself a benchmark. It relates to getting the best products and services at the

best value and lowest overall cost. It is designed to segment external spend and ensure that

procurement resources are focused on the most important sourcing purchase categories. What

sets strategic sourcing apart is its continuous attention to improving and re-evaluating the

purchasing activities of a company, thus enabling organizations to adapt to changing market

forces.

The structuring of supplier relationships also depends on the sourcing group strategy chosen.

The first step is to place your types of sourcing into strategic categories:

15. Category 1—Non-critical:

Usually, indirect materials and services, standard off-the-shelf items, and MRO-type items

16. Category 2—Leverage:

Usually, components, parts, and raw materials that enter into the composition of the end

product

17. Category 3—Bottleneck:

Usually, a one-time purchase of fixed assets, capital equipment, facilities, or technology

18. Category 4—Strategic:

Usually, high spend-type services like security, travel, maintenance, transportation,

engineering, etc.

Remember that supply market characteristics and commodity/service importance can drive your

procurement strategies as well as being a strategic component used to drive maximum

organizational competitive advantage.

The following model can help you visualize what type of impact these purchasing categories can

have on your business in relation to market complexity and can assist you in procuring specific

goods and services:


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For example, in this Purchase Category Assessment Positioning Grid, you can see, based on each

category’s business impact and each category’s supply market complexity, that Category 4—

Strategic should be your highest priority. Therefore, using the purchasing strategic relationships

of alliance or partnering in conjunction with global sourcing, you will be most apt to achieve

purchasing excellence for your organization. Applying this logic to the remainder of the grid

should help you determine progressively those areas that demand your attention most.

PURCHASE CATEGORY ASSESSMENT

PPUURRCCHHAASSEE CCAATTEEGGOORRYY AASSSSEESSSSMMEENNTT PPOOSSIITTIIOONNIINNGG GGRRIIDD

LEVERAGE

CATEGORY 2

Supplier consolidation

Volume leveraging

STRATEGIC

CATEGORY 4

Strategic relationship

Global sourcing

NON-CRITICAL

CATEGORY 1

Best price evaluation

Volume leveraging

BOTTLENECK

CATEGORY 3

Process improvement

Process redesign

HHIIGGHH Category’s Supply Market Complexity

Cat

ego

ry’s

Bu

sin

ess

Imp

act

HHIIGGHH

LLOOWW


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5. Advance your communication and negotiation skills.

With so much procurement taking place on a global level, one needs to hone the ability to

negotiate effectively, especially across international boundaries. In short, a cross-cultural

negotiator has to be a good communicator. It may sound obvious, but communication impacts

everyone and has a profound influence on how we act and respond. It is the way people create,

send, process, and interpret information.

Once negotiators establish cross cultural rapport, barriers disappear, trust grows, and an

exchange of information follows. This means negotiators must be aware of:

19. Their own culture

20. The recipient’s culture

21. The expectations surrounding the situation at hand

To function successfully in a variegated world—reflecting multi-national, multi-ethnic, multi-

environment, and multi-functional factors—you should strive to be as comfortable doing

business internationally with your global colleagues as you are at home. Even the most

successful native negotiator will need to keep abreast of ever-evolving cultural influences as he

inevitably ventures into the realm of foreign negotiations.

The study of paralanguage (also known as paralinguistics), which focuses on the verbal aspect of

communication, opens up the most direct avenue of understanding other cultures which may

have been elusive to us in the past.

Beyond paralanguage, studies also show that we are more comfortable with certain cultures and

have an easier time establishing rapport there than we do in less familiar cultures. Those

cultures that are more difficult will require the negotiator to work harder to establish rapport so

that barriers disappear, trust grows, and an exchange of information flows freely. It is therefore

essential to become aware of key cultural variables that can affect the communication process,

thereby influencing perceptions during the negotiation process.

Negotiation can be considered a very specialized form of communication. More specifically, it is:

22. A specialized process of communication called bargaining

23. A mutual discussion and arrangement of the terms of a transaction or agreement

24. The use of argumentation and persuasion to resolve issues in a business arrangement

25. An attempt to find a win-win solution which will maximize the interest of both parties

26. The application of facts and logic supported by the strengths of a bargaining position to

achieve valid and necessary business objectives

27. A give-and-get situation, where the purpose is to exchange a material, item, product, or

service for monies or value in order to reach agreement


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The successful negotiator deals most effectively when he/she has identified his/her strongest

points and uses them strategically. Here is the essence of the negotiation process:

THE NEGOTIATION PROCESS


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6. Cultivate inbound freight control opportunities.

Management of the inbound freight function is one of the most overlooked areas for significant

cost reduction. Some estimates rate inbound freight costs as high as 35% of the total logistics

cost for many companies. Remember that any savings in inbound freight costs can go directly to

the bottom line. Most successful organizations who have paid attention to inbound freight view

inbound freight management as controlling their inventory in transit.

Since your inventory is, in many cases, your largest asset, the management of this asset is critical

to your business success. The proper management of this function plays a key role in achieving

supply management inventory, productivity, and service goals. Inbound freight involves the

management and control of freight from domestic and offshore suppliers, consolidation of

vendor shipments, direct (drop) shipments to customers, multiple shipping points, and

warehouse cross dock opportunities for replenishment and backorder processing.

Effectively controlling the inbound flow of materials/product to your organization is a

complicated process, and it is becoming more complex as customer demands increase in terms of

their expectations of service levels. As you begin to analyze your inbound freight practices, you

should establish objectives that will help guide your decision making process. Objectives can be

established in the following areas; among others:

28. Reduced freight costs and improved ‚bottom line‛

29. Improvement in on-time deliveries

30. Reduction in purchasing lead times

31. Fewer handlings and less damage

32. Lower inventory levels and reduced carrying costs

33. Providing maximum visibility into the receiving process

34. Improvement in warehouse productivity

35. Increased customer service


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7. Focus on enhancing the contracting process.

Sometimes the most difficult part of the contracting process is knowing when you truly have a

contract and when you do not. There are a number of quasi-contractual situations that have

caught many purchasing professionals off guard and cost their organizations dearly.

Conducting the contracting process across international boundaries can complicate matters

further.

For example, the UN Convention for International Sale of Goods (CISG) permits all types of

evidence, including that developed prior to, during, and subsequent to the formation of the

contract. Sometimes, international parties in a negotiation may be motivated to take your

discussions as offers. Under the CISG, there is no provision for preventing assertions that

contracts have been concluded solely on the basis of oral statements. The message to purchasers

is to maintain more copious records of all negotiations with international suppliers in order to be

able to come forth with complete evidence if called upon to interpret a contract under the CISG.

To avoid committing yourself, especially in international settings, follow these guidelines:

36. Document your conversations.

37. Conclude conversations with, ‚You, of course, recognize that we do not have a contract until

….‛

38. Send a follow-up letter, facsimile, or e-mail that sets forth the precise status of your

negotiations.

The concept and design stage for your internal customer involves the introduction and

specification design of a product or a service project SOW, or it can involve an improvement or

modification made to an existing product or ongoing service. It is during this stage when

purchasing has the most impact on reducing costs.

There are plenty of acronyms to go around in the contracting process, and choosing the right tool

for the task at hand often proves perplexing to even seasoned purchasing professionals. RFX, for

example, is one of the most common acronyms in strategic sourcing and procurement. It is a fill-

in-the-blank type of reference. The RF represents ‚Request For‛ and the X is just a placeholder

for I, P, B, and/or Q. In other words, RFX is a term that captures all references to RFI, RFP, RFQ,

or RFB. The RFX process, for example, includes Request for Information (RFI), Invitation for Bid

(IFB), Invitation for Tender (IFT), Request for Bid (RFB), Request for Quote or Quotation (RFQ),

and Request for Proposal (RFP). Their purpose is to provide a solicitation platform for a

purchaser to gather information from suppliers in various manners that will allow them to make

educated decisions on whom to purchase from, which products or services to buy, and under

what terms.

The goal of an effective RFX process is to deliver the greatest value to your organization through

a course of action that provides a true and solid means of obtaining information from your


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supplier. It is a means of assembling all the information required to arrive at a well-grounded

conclusion. Without the ability to select and apply the correct RFX tool at the correct time, the

solicitation process can suffer timing setbacks, miscommunicated terms, and even the need for

complete redefinition—all of which adversely affect the desired end result.

Here is a snapshot way to determine what RFX formats to use in certain sourcing conditions:

RFX FORMATS & SOURCING FACTORS CONDITIONS

SOURCING FACTOR

CONDITIONS

RRFFII RRFFQQ RRFFBB//IIFFBB//IIFFTT RRFFPP

DEFINABLE OR

AVAILABLE

SPECIFICATIONS OR

REQUIREMENTS

Known and

unknown

Known off-the-shelf

goods and standard

services

Known goods and

services

Unknown detail,

providing the what

and why

AVAILABILITY OF

SUPPLIER CAPABILITY

OR COMPETITIVE

SUPPLIER BASE

Known & unknown;

depends on

preferred or

approved supplier

lists

Known, usually

qualified supplier

list

Known & unknown,

depends on

preferred or

approved supplier

lists

Known, if RFI has

been used

USER OR INTERNAL

CUSTOMER

COLLABORATION

Encouraged by early

purchasing

involvement

Completed, off the

shelf goods or

standard type

services

Usually completed Required through

early purchasing

interaction

LEVEL OF SUPPLIER

COLLABORATION OR

COMMERCIALLY

ATTRACTIVE

Encouraged by early

supplier or vendor

involvement

Completed since it is

commercially

attractive

Completed since it is

commercially

attractive

Required through

supplier and vendor

value proposition

analysis

NEED FOR DETAILED

PRICING

INFORMATION

No, but standard

pricing acceptable

Yes, based on trade

custom/practice

Yes, based on your

bid/tender

guidelines

Yes or no, according

to RFP format

POTENTIAL SAVINGS

OPPORTUNITIES

Low potential Low potential, but

possibly negotiable

It depends if sealed

bid or subject to

BAFO

Very high,

depending on spend

category

INHERENT SOURCING

RISK

Low risk Low to medium risk Medium risk, more

so if sole source

High risk


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Though each type of RFX has a unique function and place in the solicitation process, it is

amazing how few purchasing professionals know when and how to apply them accurately. So

one of the first challenges to achieving excellence is learning how to make the most of these tools

in the appropriate context. Your sophisticated suppliers will know the difference, and so should

you!

In today’s litigious and competitive business world it is also important for contracts to reflect

accurately the rights and obligations of the parties. Increasingly, purchasing departments and

purchasing professionals are being held responsible for assuring that appropriate language is

included in contracts to ensure that the purchaser obtains the goods and services desired at a fair

price and their interests are appropriately protected.

Why have contracts?

39. To obtain needed goods and services on schedule

40. To create a meaningful relationship between parties

− Agreements define rights and obligations

− Breaches have legal consequences

41. To create a lasting relationship between parties

− Contracts are documents that memorialize agreement about the relationship

− They enable separation of formation and performance

42. Contracts are risk management tools

And let’s not forget that the primary purpose of a contract is to obtain goods or services—on

schedule. As such, the most constructive way to resolve contractual difficulties is through the

negotiation process.

To create sound contracts, though, purchasing personnel have to go beyond the negotiation

process. They cannot rely on busy legal staff to review all their actions; rather, they must

understand the laws and business environments relating to the contract and know when to seek

additional legal advice.

Purchasing provides the most value when it anticipates events and mitigates loss and risk.

When negotiating contracts, the parties try to anticipate likely and unlikely situations that may

arise and provide for their solutions. When this fails, parties often resort to formal dispute

resolution methods such as litigation or arbitration. It is therefore critical for purchasing

personnel to become actively involved in avoiding contractual problems and resolving legal and

business disagreements early in the process, limiting or eliminating the subsequent need to resort

to formal dispute resolution or claims in a court of law.

Essentially, as a purchasing professional, your role in creating contracts is twofold:

1. Make sure that what the internal customer or user wants is in the contract.

2. Make sure that the contract contains the necessary clauses for the type of purchase at hand.


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WHY SEVEN-STAR PURCHASING MAKES SENSE FOR YOU—RIGHT NOW

CPO Priorities, a report by Aberdeen Research Group, shows a marked acceleration in the

significance of procurement's current role. Although it remains the extreme exception for

procurement to be considered the leading competency of an enterprise, 89% of the survey

respondents indicated that the procurement function has grown more strategic over the past three

years. Procurement's continued stride forward is also evidenced by the fact that nearly a fifth of all

Chief Purchasing/Procurement Officers (CPOs) now report directly to the president or CEO of their

organization. More than ever before, purchasing managers are seen as needing an increasing array

of tools and ‚best practices‛ that can be leveraged to reduce costs and increase procurement

effectiveness.

According to another new study sponsored by KPMG International, Beyond Purchasing: Next Steps

for the Procurement Profession, procurement management has taken on an increasingly strategic

and important role at many companies, but in many respects still has a long way to go to reach

maximum performance. The report, based on surveys of nearly 600 company executives from across

the globe, was conducted by the Economist Intelligence Unit. A full 74% of respondents consider

purchasing/procurement performance to be either ‚high‛ or ‚very high‛ on the corporate priority

list—perhaps not surprising in a period of rapidly rising commodity-related costs, but also

undoubtedly reflective of a growing appreciation for the role that purchasing/procurement can play

in improving the supply chain and bottom line.

Why is this important to you? As we move into a new era of great expectations for the purchasing

and supply management executive, each of the Seven-Star Purchasing Areas of Excellence will

represent areas that need to be handled—and handled well—by tomorrow's purchasing and supply

management functions. Keeping up with the fads simply won’t keep you competitive: Perfecting

the basics will.

Please note that the Seven-Star Purchasing Areas of Excellence presented in this whitepaper are

prescriptive rather than diagnostic. Our goal is to provide you with a catalyst for ongoing

discussion about identifying your top improvement opportunities. With a plethora of distracting

tips, techniques, and technologies competing for your attention, it’s all too easy to overlook the less

glamorous fundamentals, those that may be considered passé but will nevertheless provide you

with the surest foundation for achieving purchasing excellence and corporate profitability. Amid

the critical challenges, talent shortages, tightening constraints, cloudy strategies, and ever-increasing

pace of today’s purchasing environment, we urge you to focus first on what is vital. Acquiring skills

relating to the Seven-Star Purchasing Areas of Excellence—and being able to use them with

agility—will ultimately yield the greatest possible ROI for you and your organization.


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ABOUT US

PURCHASING & PROCUREMENT CENTER

The Purchasing & Procurement Center provides comprehensive information for Purchasing &

Procurement Professionals. Within its scope the Purchasing & Procurement Center ensures that you

get all your needs covered through web based information, Reports & White Papers, and more

importantly thru personal assignments of in-house trainings, consultations etc. You can contact us at

[email protected] for a Free 30 Minutes Consultation of your purchasing &

procurement needs.

CATTAN SERVICES GROUP, INC.

CATTAN is a consulting and training firm specializing in Procurement & supply chain

management. Cattan’s cooperation with Purchasing & Procurement Center extends in jointly

providing seminars, in-house trainings, consultations etc.

Cattan’s success is based primarily on the high level functional expertise of our staff. We offer our

clients value through a very unique combination of advanced degrees and certifications as well as

line, staff, and consulting experience, thereby providing a unique blend of theoretical values mixed

with firing line, hands-on experience to ensure bottom-line results. Simply put, ‚we practice what

we teach.‛ To find out more Cattan, see www.cattan.com.

mailto:[email protected]

Documents

This Report is brought in co-operation with Cattan Service ... … · reengineering or change management efforts that are focused on best practices, benchmarking, balanced scorecards,