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How to enhance procurement and supply chain management capabilities?

Initiatives & Activities 

​By Mansour Baker, SHRM-CP

Posted  18 March 2020

​Refine procurement and sourcing strategies to coordinate and manage all company supply chain management functions based on an assessment of company’s procurement and material management capabilities and needs.

Near Term (1-6 months) Initiatives

• Evaluate current procurement and material management activities and balance of centralized versus satellite procurement capabilities and structure.
• Develop a supply chain management strategy to address warehousing, distribution, supplier partnerships, and IT infrastructure needs.

Medium Term (6-12 months) Initiatives

• Set performance indicators and service level agreements (SLAs) to track performance and serve as a basis for issue identification and escalation.
• Benchmark supply chain performance for specific high-impact categories.

Exhibit 1

​Advanced vendor management tools and processes enable effective oversight and quality control for all outsourced activities.

Objectives

• Advanced supply chain management fully meets company diverse procurement, storage, and distribution needs.
• Coordination and standardization of procurement and material management activities remove duplication of procurement efforts and create economies of scale.

Key Activities

• ​Collect and inventory existing documentation related to procurement, material management, and applicable laws and regulations governing these functions
• Evaluate documentation to identify gaps and/or redundancies
• Develop recommendations on how to address gaps and/or redundancies 
• Develop supply chain management strategy aligned to company strategy 
• Align work plans/processes for individual functions (procurement, warehousing, distribution)
• Draft initial high-level sourcing strategy
• Assess capability of IT functions to support restructured supply chain functions

Key Deliverables

1. Inventory of all procurement and material management activities 
2. Evaluate existing documentation 
3. Recommendations to address gaps
4. Supply chain management strategy
5. Aligned processes 
6. High-level sourcing strategy
7. IT functional assessment

1. Inventory of all procurement and material management activities 

• Collection and inventory existing documentation and processes related to procurement, material management
• Assessment of relevant legal and regulatory requirements

2. Evaluate existing documentation 

• Report assessment existing documentation to identify gaps and redundancies

3. Recommendations to address gaps

• Recommendations on best approach to close identified gaps

4. Supply chain management strategy

• Summary of gap analysis and recommendations
• Development of strategy for managing company’s procurement and material management needs
• Identification of high-level requirements and action steps

5. Aligned processes 

• Alignment of company procurement and material management processes to company supply chain management strategy

6. High-level sourcing strategy

• Assessment of sourcing options based on outcomes of strategy development 
• Development of strategy to guide sourcing decisions for procurement and material management

7. IT functional assessment

• Assessment of company IT capabilities against functional requirements emerging from company supply chain management strategy

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