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CHAPTER 4
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.
Executive Steering
Committees
A cross-functional, executive level group that has
responsibility for overseeing centrally-led supply
initiatives and objectives.
Commodity Management
Teams
Cross-functional teams that develop
commodity strategies with responsibility for
supplier selection decisions and relationship
management.
Buyer-Seller
Improvement Teams
Cross-organisational teams that focus on
improvement opportunities and projects between
the buyer and seller.
Value Analysis/Value
Engineering Teams
Cross-functional teams that have responsibility
for systematically analysing the relationship
between product/service function and cost.
New Product Teams with
Purchasing and Supplier
Involvement
Cross-functional teams that have a responsibility
for developing new products and services with
purchasing and supplier support.
Supplier Development
Teams
Cross-functional teams that have responsibility
for managing supplier performance improvement
opportunities.
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