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Strategic Procurement
Procurement in an organization is a critical business activity and it directly impacts all the value drivers in an organization. Organisations, conventionally have focused their cost reduction efforts on labour and overhead reduction which accounts for only around 20%-40% of the costs in a company.
Only now have firms begun to realize the value enhancement opportunity presented by purchased goods and services. Some enterprises have attempted to address these issues by undertaking a veriety of initiatives such as JIT, Vendor Managed Inventories, Vendor Partnering, E- Procurement but have achieved limited success from these piecemeal efforts.
KPMG's Strategic Procurement methodology uses a holistic approach to improve the effectiveness of procurement in an organization. Strategic procurement delivers clear-cut benefits to an organization such as:
- Contract Compliance leading to more goods being purchased at more favourable terms and prices
--Increased
use of preferred suppliers
--Reduced off-contract spending
--Reduced processing errors
- Leverage of purchasing power
--Consolidation of spend with each supplier and each product category
--Negotiate increased discounts and contract terms
- Reduces process costs by streamlining purchasing processes
--Reduction of administrative cost due to reduced error rates, processing time and on-site inventory
--Dedicated procurement employees focus on value-add activities such as negotiating even better supplier contracts
KPMG adopts a structured approach to address all the key issues to create an integrated, efficient and effective procurement organization thereby enhancing stakeholder value.
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