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Abstract
Over the last decade the purchasing function has begun to establish itself as a strategic contributor, often driving competitive advantage through improvements to cycle times, quality, service, price and total cost. Now, companies are beginning to take control of the so-called indirect spend in addition to driving continuous improvements in spending for production. In failing to control the commercial aspects of their indirect spends - leverage, total cost, terms and conditions, supplier performance specifications and measurements - corporations may be leaving 8%-15% of their indirect dollars on the table. Steve Trecha, CEO of Integrated Strategies, says companies are more likely to succeed if they follow well-defined processes. Critical activities that need to be included in such processes: 1. Establish objectives for indirect buying initiatives. 2. Populate and train teams. 3. Target purchase categories. 4. Establish initiative management processes. 5. Create a budget reduction process. 6. Develop processes for new supplier introduction and development. 7. Measure results and track compliance.