Historically companies have turned extensively to

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Unformatted text preview: wn costs and increase service and quality levels. For them, the relationships with suppliers are considered to be an important element of their overall business success, and they are reluctant to hand them over to a third party –– even if doing so would help them leverage volume or otherwise reduce costs. Historically, companies have turned extensively to management consulting firms to help them understand and apply best practices within their purchasing departments. Normally, the consulting team begins by assessing the company’s situation and improvement potential, and develops a set of customized strategies and action plans. Subsequently, the consultants work jointly with purchasing staff on a set of “pilot” spending categories to execute the improvements and provide training in new techniques, which the client is expected to use on an ongoing basis without additional consulting support. While it sounds good in theory, and has often provided a strong short-term payback, many companies are finding that institutionalizing these improved strategies and purchasing techniques is a major challenge. Achieving the benefits typically involves applying a disciplined and complex methodology t...
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