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Procurement reorganisations 'must be based on sound principles'

24 April 2012

Companies that are looking to resize their procurement operations should ensure that their decisions are based on sound business principles.

This is the advice of consultancy firm Efficio, which has suggested that although business leaders usually understand the function of their purchasing departments, they do not know what the appropriate scale of the operation should be.

Frequently, companies try and solve this issue by benchmarking other organisations, but the report suggests this may end up being a case of the "blind leading the blind".

Instead, firms must consider factors such as the value they are seeking to generate, the number of projects they wish to carry out and the means available to them, among other issues.

Efficio vice president Juraj Priecel said making a case for altering the size of a procurement operation should "not be a case of benchmarking, but instead a pragmatic and logical application of some sound basic principles that are driven by the specific situation of the business".

Earlier this month, a report from the Hackett Group revealed that businesses are likely to take a more globalised approach to procurement this year.

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Categories: Functional Practices, Procurement & Supply Chain

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