Maturity of the Purchasing Function
unction
Traditionally, in many companies the perceived function of Purchasing is quite
narrow. The key responsibility for Purchasing usually is buying the parts that
Operations needs at the lowest possible price. As a result, frequently Purchasing is
concentrating on negotiation and market price. Recall that SCM is all about creating
value for the final customer. In reality; purchasing organizations are not equal or
some are more advanced nced than others in controlling processes, data consolidation,
performance measurement, risk management and marketing purchases, etc.
The purchasing functions are complex entities and companies don’t just need to
decide how many people they need to achieve their purchasing goals. They also need
to consider the split between ”strategic buyers,” who are responsible for developing
and implementing category strategies, selecting suppliers, negotiating contracts, and
managing supplier relationships
relationships and category performance; and “operational
buyers,” who manage day-to to-day
day orders and the challenges around deliveries and
payments. Indeed; the interest of this exercise is not so much to determine the
current level of maturity of the company's purchases
purchases but, on the contrary, to define a
roadmap to achieve the desired one. Clearly, this roadmap is used to set the major
changes in the purchasing organization in the medium and long term and the
exercise can be repeated at regular intervals to verify that the
the roadmap is respected.
Purchasing Moroccan observatory-
observatory ONA- has developed a self-assessment
assessment tool called
purchasing maturity Matrix Mitrab Model which can be used by purchasing
departments working with or focusing on efficiency and their level of maturity
within different areas of procurement and purchasing. It is a practical tool aimed at
supporting the purchasing department in becoming a key partner – a change agent
within the company. The P4M -Purchasing
Purchasing maturity matrix Mitrab Model-
Model makes it
possible
ssible to evaluate the positioning of the purchasing function and its level of
expertise. It also allows giving precise objectives to be achieved by the purchasing
function to progress in the achievement of the political orientations and to evaluate
annuallyly its positioning and defining the action plan to progress in maturity.
In addition The P4M matrix is structured around nine main dimensions in Procure-
Procure
to-Pay (P-t-P):
PURCHASING MATURITY METRICS MITRAB MODEL
Tools
Performance 10%
20% PSI
10%
ORGANIZATION CRI
10% 10%
Process SRI
10% Policy WRI 10%
10% 10%
Purchasing tools: This step can be summed up in the mastery and perfection of all
the stages of the purchasing process as the Control costs (TCO: Total cost
ownership); Anticipate and manage risks and knowing how to sell the added value
of the function.
People skills index(PSI): Being a Purchasing Manager isn’t an easy thing. The
position demands them to possess diverse skills to excel in their job (Effective
relationship-Workplace Skills and Applied knowledge).
Customer’s relation (Internal) Index (CRI): the power balance between internal
customers and purchasing department.
Supplier’s relation index (SRI): Improving the level of your relationship (Brand of
the Company) with the suppliers.
Working relation index (WRI): Measuring company-supplier working relations.
Purchasing Policy: consists in defining strategic axes and objectives for a given
period purchasing process
Process: once objectives are set the buyer must determine a process approach that
will achieve his goals.
Organization: An organization must also choose how responsibility will be shared
between the central purchasing function and individual business units.
Performance and added value: The performance of the purchasing function can be
measured using a variety of measurements.
The measurements can include: Cost Saving; Increased Quality; Purchasing
Improvements; Purchasing Performance and Savings…
The matrix (P4M) shows you in the end your level of maturity and major
dysfunctions, so it proposes a plan of action for continuous and progress
improvement.
Abdellatif MITRAB - Soft Killer
CEO & Fonder National Observatory of purchasing- http://www.ona
www.ona-maroc.com
