Over time, and thanks to its numerous project experiences, OJC Consulting has become the essential partner for Direct Purchasing.
At a time when it is necessary to build resilient supply chains, we believe in building solid but also innovative IT solutions to assist your business in developing and maintaining these partnership.
The world of direct purchasing imposes a "new" positioning for, those working is this specialist area, very much upstream of the sales and design process of the company. The understanding of the business finesses, essential to the creation of value, is today core a strength of our company and it is one of the key drivers that convinced our customers to trust us with their spend journey.
Direct Purchasing Management is essential for economic optimization as well as for the security of its supply chain. Steering therefore consists in putting under control :
The effectiveness of the management system depends on the control and mastery of the process, which must be understood, documented and equipped (information system and indicators). The input and output data of the process represent a large part of what must be taken into account and/or controlled.
The expression of purchasing needs
Often originating from design offices through PLM or other design systems, it almost systematically requires enrichment by buyers and quality specialists, before being considered as "purchasable"
Spend analysis
Essential to the construction of Purchasing Strategies and the Master Purchasing Program, it includes a detailed analysis of risks before being broken down by purchasing category (Category Management)
Logistics analysis (Supply Chain Management)
Understand the interoperability times along the supply chain to anticipate and secure the critical path of production of the product/service sold (Lead Time Management)
Operational evaluation of suppliers (performance)
Their ability to meet quality, costs and deadlines.
Controlling risks
Risks related to the preservation of the supply chain.
Continuous improvement plan for the purchasing/supply process
Broken down by purchasing category in terms of optimization and security.
The exploitation of operational data from the various Enterprise Information Systems is therefore strategic for companies and requires a very high level of quality.
The achievement of results depends mainly on an adapted integration of the Information Systems:
Respect and support of professional gestures
Creation and management of own data
Data analysis and operational decisions
Optimizing purchasing can be summarized as controlling the cost chain, end-to-end, from the idea of need, to its compliant delivery.
Nevertheless, the advent of the market economy has greatly complicated traditional cost patterns by adding complex logistic patterns and quality impacts. These patterns are still evolving and now take into account new environmental and societal issues.
To optimize purchasing in a sustainable way, it is necessary to remain agile in order to adapt the company's cost models. The optimization of purchasing is one of the actions to reduce the risks incurred by the companies on their own markets.
The main themes required to optimize purchasing through the cost pyramid:
Price:
It is the easiest information to collect since suppliers give it in response to an expression of technical-functional need.
The price is inseparable from the notion of approach costs, indeed for a product to be available to the customer, it must still be transported. Here the notion of Incoterms (ICC | International Chamber of Commerce (iccwbo.org)) is key because a price is systematically expressed with an incoterms knowing that the latter defines who is in charge of the costs and the responsibility (insurances). It is therefore obvious that the first level of comparison between suppliers' prices must be carried out at constant incoterms during a bidding process.
In the approach costs we often forget the impact that the "packaging" can have.
We then have a set of cost types that should allow buyers to compare and reasonably project a saving for the company:
Acquisition costs:
Allow to quantify the industrialization time of a supplier and to measure a certain return on investment.
Carrying costs:
Corresponds to inventory and stocking costs, which can be directly related to the logistics performance of suppliers.
Maintenance costs:
Allow to anticipate the costs of maintaining the operational condition of the means (machines, buildings).
Usage costs:
Collect the non-apparent costs of using machines and buildings, which may be directly related to, for example, environmental performance.
Non-quality costs:
They are the indicator of what went right or wrong on the other cost lines and also help determine what is optimizable or optimized.
All of these costs represent the value chain, which each buyer must optimize. This is why he must be able to count on exhaustive and clean data sources that a well constructed information system can provide. The development of "costing" and "cost modeling" tools aims to support all the combinations of cost components, which the buyer optimizes through the construction of purchasing and logistics scenarios.
Securing Direct Purchasing is strategic for companies. We talk about securing because a significant portfolio of risks can affect companies.
The first visible risk to be secured, due to the activity of companies, is the disruption of supply or "Supply Chain". Since companies buy products and services from suppliers, they entrust a part of their production chain to third parties (Direct Purchasing).
The internal production time becomes for the purchased products and services the realization time. This lead time must be secured in order not to slow down or stop the internal production chain. Unfortunately, this lead time is made up of several components:
Supplier production time
Transport time between sites
Control time
Other...
which complicates:
Collecting data from multiple third parties.
Building an economical, efficient and secure supply chain.
Maintenance and control of the supply chain (Supply Chain Management).
It is therefore the buyer's duty to know the critical path of production (including supplies) in order to implement the associated security actions.
Notes:
Effective supply chain management requires the following information for each item purchased
Securitization can take on other aspects that are just as critical for companies but often less easy to understand without a deep knowledge of the purchasing segments/categories.
In a non-exhaustive way we can quote:
The perpetuation to cover the risks of shortage whose causes are multiple:
Compliance with ethical rules to cover the risks of loss of image of the company in terms:
Environmental compliance to cover several combined risks (Image, Pollution, Cost) for which, the causes arise at :
Risk management is still often limited to supplier risk management (SRM) but as mentioned above, the scope to be covered is much wider and more invasive.
This means that purchasing information systems, which support the company's strategic decisions in terms of purchasing risk management, must be enhanced and made robust.