Purchasing and procurement


What we do

Depending on the industry sector, businesses spend between 40% and 70% of their turnover on bought-out goods or services. Manufacturing firms are at the upper end of this range. So a programme to improve purchasing and procurement will have a significant – and direct – impact on bottom-line performance. Businesses with an immature or under-developed purchasing capability should expect savings in purchasing costs of up to 30% following a systematic review and the implementation of a programme of improvement.


How we do it
We ask clients some basic 'purchasing' or 'procurement' questions at the outset. For example:
  • What is the split between materials, indirect purchases, services, capital facilities and consumables?
  • How much of your spending is routed through your purchasing department?
  • How many people do you have in purchasing, and to whom do they report?
  • What measures of suppliers’ performance do you monitor? Cost, quality, delivery, innovation?
  • How do you tell your suppliers what you need?
These are not difficult or searching questions. But the ability or otherwise of managers to answer them shows how sophisticated the purchasing function is. The results indicate the potential to improve matters and where a more in-depth analysis should start. Armed with more data we can plan a sustained effort to review systems and processes, to overhaul strategies and polices, and to get the best out of structures and people.

Our experience

Improvements in procurement are a regular feature of our assignments on restructuring and cost reduction. But we also work with clients in many sectors on specific projects to enhance the contribution of purchasing and procurement to bottom line results. We expect to secure a significant return on the investment in our services. We work in partnership with managers over a longer period to introduce best practices that will help them:

  • to innovate and grow by exploiting suppliers’ capabilities
  • to optimise the value chain
  • to introduce advanced cost management
  • to manage risks and the continuity of supply.
copyright // Collinson Grant