Eskom Procurement Book 2015

PROCUREMENT AS A SUPPORT AND STRATEGIC FUNCTION WITHIN COMPANIES

Table 4.2: Examples of groups and teams in supply management. Group or Team Description Customer Advisory Boards An executive level group that brings suppliers, customers and the OEM/producer together to share information such as end customer requirements and expectations. Buyer-Supplier Councils An executive level group that brings together the

OEM/producer and a rotating group of suppliers to share information such as product forecasts and product development plans. A cross-functional, executive level group that has responsibility for overseeing centrally-led supply initiatives and objectives. Cross-functional teams that develop commodity strategies with responsibility for supplier selection decisions and relationship management. Cross-organisational teams that focus on improvement opportunities and projects between the buyer and seller. Cross-functional teams that have responsibility for systematically analysing the relationship between product/service function and cost. Cross-functional teams that have a responsibility for developing new products and services with purchasing and supplier support. Cross-functional teams that have responsibility for managing supplier performance improvement opportunities.

Executive Steering Committees

Commodity Management Teams

Buyer-Seller Improvement Teams

Value Analysis/Value Engineering Teams

New Product Teams with Purchasing and Supplier Involvement Supplier Development Teams

4.6.2 INTEGRATING PROCUREMENT IN THE SUPPLY CHAIN

The supply chain management concept represents an integration of information flows, extending from the supplier to end user. Materials management, on the other hand, is generally involved with the flow of materials into an organisation. Many organisations combine materials management (input function) with logistics (physical distribution) management, which includes all materials flow functions into and out of an organisation. As businesses grow and employees are added, it becomes evident that certain advantages would accrue if individual functions, such as purchasing, stores, traffic, production scheduling, inventory control and quality control, were separated and turned into full-time managerial assignments. This would permit occupational specification. Because of communication and co- ordination problems, however, it becomes clear that bringing together under

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