INTRODUCTION FOR MANAGING PROCUREMENT AS A PROFIT CENTRE

Traditional view of purchasing was as a tactical function as organization views them as an organizational tool to support business activities, such being for buying supply or services to meet a demand from customer.

Companies goals was to produce a great product or services and sells it to the market place and purchasing job is to focus on getting the materials and services to meet those demand.

However, with the greater globalization of the market place, having a great product or services is no longer enough.

Very often companies need to sell at the lowest cost possible due to competition and one of the key area profit can be generated are via efficient and effective sourcing and purchasing of material and services, allowing companies to produce the same quality standards at lower cost.

Procurement centre are now becoming more like a profit centre to companies around the world as they are been view as the “trading arm” of the company with efficient and effective procuring of material and converted these material into high quality product and create a higher value and this profit for the company.

This program is designed by an experienced professional consultant and trainer with over 30 years of experience to help participants to achieve the goal stated above.

This training program is highly recommended for all level of employees, including those in clerical, supervisory, executive and managerial position responsible for procurement and purchasing, supply chain and general management

COURSE OBJECTIVES

By the end of the 2-day interactive session, the learning curve achieve will enable the following:-

• UNDERSTAND the strategic  role of procurement in business operation
• UNDERSTAND the concept of procurement as a profit centre
• IDENTIFY the type of strategy to be in place to manage suppliers and  vendor for performance
• DEVELOP action plan to implement suppliers and vendor management strategies
• CARRY OUT risk assessment and take action to overcome to ensure supplies are not disrupted
• UNDERSTAND on how to produce profit oriented report for procurement
• UNDERSTAND key processes to turn procurement into profit centre

METHODOLOGY

This training will involve the following area to enhance learning:

• Power point presentation
• Case studies & Brain storming session
• Discussion on subject of learning
• Facilitating by trainer to enhance understanding of subject matter
• Exercise to evaluate participants understanding

COURSE CONTENT

Module 1 – Procurement as Profit Centre

• The definition of Cost Centre
• The definition of Profit Centre
• Evolution of Procurement from Cost Centre to Profit Centre

Module 2 – Understanding proper Procurement structure and the Objective of Procurement

• Suppliers versus Vendor
• Key Objectives of Procurement
• Procurement organizational structure
• Definition of Strategic and Tactical
• Key Procurement Analysis using PQR
• Strategic Role of Procurement
• Tactical Role of Procurement
• Procurement Quality and System Procedure

Module 3 Developing & Increasing Value Chain in Procurement system

• Key Element of Value chain creation
• Value chain Frameworks
• Area of value chain creation
• Competitiveness model for Value chain creation
• Case study

Module 4 Strategic Sourcing and Tendering and Bidding System to increase competitiveness and profit

• Traditional sourcing – understand the history
• Strategic sourcing – creating competiveness advantage
• Understanding tendering and bidding system
• Reverse bidding
• Strategic Tendering process and procedure
• Case study

Module 5 – Choosing your Partner in Procurement for better profitability

• 11 key elements of supplier and vendor selection
• Positive supplier trait and negative supplier trait
• Cost and Price evaluation strategies
• Financial analysis, ratio analysis
• Review the Balance sheet
• Audit and risk management
• Case study

Module 6 – Managing Orders and Delivery Management

• Effective Purchase ordering system
• Type of Purchase order
• Purchase order – a legal document perspective
• Expediting management
• Case study

Module 7 – Strategic Supplier and Vendor Management

• Key element of supplier relationship management
• Cycle of Supplier Management, from selection to off boarding
• Supplier traits, knowing how to deal with them
• Soft strategies in supplier management
• Hard strategies in supplier management
• Contract management
• Reviewing system – Setting objectives
• Reviewing system – Measurement
• Reviewing system – creating competitive advantage and off boarding
• Quiz

Module 8 – Managing Cost Saving as Profit Generator

• Cost Reduction versus Cost Avoidance
• Cost saving process cycle
• Cost saving measurement strategies
• Cost saving strategies
• Understand ERRANT concept
• Cost saving organizational structure
• Case study

Module 9 Procurement Role in Inventory Management

• Type of Inventory Cost
• Inventory forecasting
• Impact of Excess Inventory
• Implementing Pull Kanban system
• Inventory turnover ratio
• Reorder and Safety stock
• Demand Planning
• Consignment stock
• Vendor Management Inventory
• Measuring Inventory cost performance

Module 10 – Reporting for Procurement Accountability

• Cost Variance management
• Key Performances Indices
• Inventory performances
• Profit analysis contribution from procurement activities

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