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Top 10 Actions for CPOs to Increase Supply Management Effectiveness
by Jack Barry
A chief purchasing officer (CPO) can increase efficiencies and effectiveness in Supply Management without major systems investments or substantial and disruptive process changes. The top ten actions offer immediate payback on ROS - return on staff!.
What are the top recommendations for CPO to measure and improve performance in Supply Management?
Identify and quantify Supplier Risk and develop Response Options
Monitor how well Supply Management provides the materials and services - on timeUse a market-basket approach to evaluate the competitiveness of purchase cost -- not PPV
Measure the impact of suppliers on the financial chain and working capital and the validity of financial reporting
Insure the effectiveness of Talent within Supply Management - training
Segment the Supplier Base and measure the life cycle cost of the "four key supply costs"
Buy on Value and Cost not Price and Discounts
Benchmark the critical (important and broken) Supply Management contributions -- not just functional activities
Spin-off transaction intensive and administrative costs in indirect support materials and services
Most importantly, reduce Supply Management process cycle times.
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