2006
New England Supply Chain Conference & Exhibition

APICS - The Association for Operations Management North Shore Chapter 20 and Boston Chapter 10    --   The Council of Supply Chain Management Professionals (CSCMP) New England Roundtable    --    The Northeast Supply Management Group, A Special Interest Group of ISM®

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Top 10 Actions for CPOs to Increase Supply Management Effectiveness

by Jack Barry

A chief purchasing officer (CPO) can increase efficiencies and effectiveness in Supply Management without major systems investments or substantial and disruptive process changes. The top ten actions offer immediate payback on ROS - return on staff!.

What are the top recommendations for CPO to measure and improve performance in Supply Management?

Identify and quantify Supplier Risk and develop Response Options

Monitor how well Supply Management provides the materials and services - on time

Use a market-basket approach to evaluate the competitiveness of purchase cost -- not PPV

Measure the impact of suppliers on the financial chain and working capital and the validity of financial reporting

Insure the effectiveness of Talent within Supply Management - training

Segment the Supplier Base and measure the life cycle cost of the "four key supply costs"

Buy on Value and Cost not Price and Discounts

Benchmark the critical (important and broken) Supply Management contributions -- not just functional activities

Spin-off transaction intensive and administrative costs in indirect support materials and services

Most importantly, reduce Supply Management process cycle times.

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