INTRODUCTION
We strongly believe that the competitiveness of an organisation can be improved by leveraging the potential of procurement and supply chain. This is achieved when there is an understanding of the building blocks of procurement and supply chain and how these can be used to provide the foundations on which to deliver business value. What does the procurement and supply chain practice include? How is it defined? For many organisations, articulating the boundaries that procurement and supply chain activity takes place within is a challenge, mainly because of the increasingly multi-faceted role it plays. Today’s procurement and supply chain organisations are required to deliver not only year-on-year cost reduction and efficiency benefits, but also to manage supply risk, develop sustainable sourcing practices and build strong relationships with key suppliers on a global basis. Procurement and supply chain can be approached from several perspectives. There is not a single definition that can wholly incorporate all elements of procurement and supply chain management practice and which is universally accepted by the business community at large. Different organisations have different definitions of procurement and supply chain management. Some organisations refer to procurement as purchasing or supply management; others include logistics, materials management or demand management in their definition. There are even some organisations that believe that the discipline is mainly relevant in a manufacturing context. However, procurement and supply chain management is equally relevant to services, retail, health, transportation, banking and other types of organisations. The evolution of procurement and supply chain management as a discipline and profession has led organisations to adopt their own definitions of what it covers. At State of Flux, we believe that procurement and supply chain is about more than just buying products and services. We have used a framework, which we call the Procurement Building Blocks , to analyse an organisation’s approach to procuring products and services and have used this framework in this report to facilitate the analysis of the current state of Greek procurement and supply chain practices.
Figure 1: STATE OF FLUX PROCUREMENT BUILDING BLOCKS
Procurement Governance defines the policies and guiding principles for procurement and the interactions between business users, supporting internal functions and suppliers. Category Management relates to the spend, contracts and risk management of all products and services that are procured as part of an organisation’s operations. Supplier Management focuses on developing supplier relationships through information sharing and performance improvement programmes. The approach to dealing with each supplier is aligned to the organisation’s supplier segmenation strategy. Buying Management relates to the sourcing, contract management and procurement-to-pay of all products and services that are procured as part of an organisation’s operations.
Procurement Governance
Category Management
Supplier Management
Buying Management
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