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Discuss the role of purchasing function in cost control and value implementation for a business. Include examples to illustrate your answers - Assignment Example

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The purchasing function of business procurement has over time evolved to become an integral part and continues to evolve in value addition to organisations. The last decade for instance has seen a lot of success in the purchase function in terms of creation of structured…
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Discuss the role of purchasing function in cost control and value implementation for a business. Include examples to illustrate your answers
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Extract of sample "Discuss the role of purchasing function in cost control and value implementation for a business. Include examples to illustrate your answers"

Download file to see previous pages The goal is increasing the value of what they offer and eliminate any non-value adding activities. A function that is poised to deliver this value due its crucial role on organisations going forward is purchasing.
Through inputs such as analysis of markets, contract sourcing and negotiations, the purchasing function plays a value adding role to organisations. The outputs of an effective purchasing function include good quality on products, services offered and materials procured. Through these outputs the purchasing function is better placed to deliver a competitive edge that is much needed in the business environment of today. Procurement and purchasing functions in the modern organisations go beyond the traditional buying role by paying attention to the bigger organisational objectives. Through the shift of focus, the purchase function can add value by placing emphasis on supplier quality and reliability. Extraction and automation of key processes in procumbent for example can release time for the workforce to attend other functions of sourcing which may be central to the needs of the business (KPMT, 2012).
Balancing long-term visions with short term goals is another way through which organisations can harness value from the purchasing function. In driving value for the organisation purchasing function can no longer wait for the exit of a supplier or rush for speciality materials in the final hours of a product launch (Santala and Syrjanen, 2010). ATMI is one organization that has eye on the long terms objectives but with tools in place to respond to changes in the short term. It is able to give value by aggressively managing risks, analysing markets and feeding the entire system short term changes needed in the long term plans.
Success in the purchasing function appreciates the need for sourcing strategically and purchasing tactically. Value can be unlocked out of the purchasing function by focussing on strategic sourcing and ...Download file to see next pagesRead More
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