Question

what are the features of the new model strategic purchasing?

Answer 1

Here are the features of the new model of strategic purchasing:

• The first feature involves conduction an internal need analysis - the current performance is benchmarked and based on targets and goals the procurement strategy is designed. It involves data collection and gets information related to current performance, resources underutilisation, cost across departments and overall growth projections.
• The second feature of the new model of strategic purchasing involves conducting an assessment of a supplier's market - In this process, the team at the strategic level will identify potential counties that are feasible and reliable sources for raw materials, components, finished good etc. The specific requirement may limit the countries for sourcing.
• Collecting the supplier information and carefully assessing them is the next important feature of the model. The supplier ability to meet the criteria can lead to a profitable scenario. Proper inspection and analysis are to be done.
• Developing the outsourcing strategy based on information is the next important aspect of the model. It depends on the competitive strength of the supplier marketplace and the risk tolerance ability of the sourcing organisation. The overall business strategy and motivation for outsourcing also plays an important role.
• Post the development part the implementation phase is the next feature of the overall strategic purchasing. It becomes part of the broader strategy in place, expression of interest and other documentation process starts.
• The next aspect involves negotiating with the suppliers and securing the best deal possible after seeing all the alternatives.
• A transition and communication plan is developed and the system helps to measure and evaluate performance based on certain key performance indicators.

Other three main features of the strategic purchasing involve:

• Long term,
• coordinated and
• a responsive system in place.

Strategic purchasing requires a long term mindset and approach with respect to relationship management.

Close, cooperative conversation and relationship with suppliers become a key aspect. Cooperation between the buyer and supplier must be relatively high and the intensity of coordination should increase considering the long -term aspect of the model.

Number and types of relationships which firms plan to form should be decided & first-tier suppliers should be adopted with greater alignment and responsiveness.

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