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CHAPTER 8
PURCHASING ANALYSIS TOOLS AND TECHNIQUES
analysis, we learned, is the organised and systematic study of every element
of cost in a part, material, or service to make certain it fulfills its function at
the lowest possible cost. Value analysis also employs techniques that identify
the functions the user wants from a product or service. In this regard value
analysis comprises a particularly useful set of tools and techniques for use in
the procurement field.
These days, business professionals of all kinds, including professionals within
the procurement function, deal with significant pressures from above and below
as their organisations try to increase their competitiveness by streamlining
processes and reducing costs. Every process and activity is being scrutinised
to ensure that it makes a positive contribution to the value of the organisation.
Procurement professionals may be asked to help establish pricing models,
contribute information to business-case analyses, or identify and eliminate Non-
Value-Added (NVA) activities within a programme area. Available expertise may
not lie in business analysis, and ‘Process-mapping’ can help.
Finally, procurement professionals will be tasked with procuring products and
services that may take the form of a rebuy, a modified rebuy or the procurement
of a new product or service. In doing so, procurement professionals need to know
what it costs to run a competitive procurement process/event and manage the
resulting contract(s). Project managers need to know what it costs to undertake
and complete a project. Project management tools and techniques can greatly
enhance the ability of procurement professionals to undertake procurement
processes/events and help to ensure that these processes/events are carried
out in a timely and cost-effective manner.
8.9 REFERENCES
[1]
Cavinato J.L. and Kaufman R.G. (eds), Value analysis, In: The purchasing
handbook: A guide for the purchasing and supply professional, 6
th
ed.,
New York, McGraw-Hill Publishing, 2000, Chapter 24, pp. 585-605.
[2]
Lewis J.P., An overview of project management, In: Fundamentals of
project management, 10
th
ed., New York, AMACON, 1997, Chapter 1,
pp. 1-3.
[3]
Lewis J.P., A general approach to project planning, In: Fundamentals of
project management, 10
th
ed., New York, AMACON, 1997, Chapter 2, pg.
23.
[4]
Lewis J.P., Scheduling project work, In: Fundamentals of project
management, 10
th
ed., New York, AMACON, 1997, Chapter 5, pp. 50-58.
[5]
Lewis J.P., Scheduling computations, In: Fundamentals of project
management, 10
th
ed., New York, AMACON, 1997, Chapter 6, pg. 60.