Procurement Management
SITUATION
Manufacturer of CDs and DVDs had a decentralized supply chain and the procurement function lacked strategic focus and state-of-the art procurement practices.
DRIVER GOAL
- Standardize Operating Procedures across the globe.
- Deliver a performance measurement system for Supply Chain and Procurement.
RESULT
- Delivered common processes and practices across the global landscape.
- Created visibility to critical supplier metrics.
Case Study
Develop Procurement Standard Operating Procedures & Performance Metrics
Issue
As a result of growth through acquisition, a manufacturer of audio cds, cd-rom, and pre-recorded audio and video cassette tapes had a highly decentralized approach to supply chain management and procurement. Further complicating the situation, the company had disparate supporting ERP systems across the global landscape which made it difficult to extract common data for measurement. The current Global Procurement organization lacked a strategic focus and state-of-the art procurement concepts. A challenging market with declining sales and margins required Procurement to reduce costs without impairing operations.
Highland Approach
Research revealed that the organization needed to unify Global Procurement through the development of Standard Operating Procedures (SOP), formalized job descriptions and common performance measurements. The Highland Group partnered with the VP of Global Procurement to define the depth and breadth of the effort to ensure a satisfactory result.
Actions Taken
Set up performance measures for supplier delivery/quality and inventory performance.
- Defined all required metrics in terms of scope, calculation, and data extraction process.
- Visited all geographic locations to determine the source of data and extraction method.
- Developed dashboards for each measurement, targets and upper and lower control parameters.
- Established a global IT team to develop the necessary data extracts and produce daily reports for review by Procurement.
- Implemented a daily data extraction and review process.
- Made Purchasing Managers accountable for daily review of performance measures and for taking corrective action where necessary.
