In most companies, procurement accounts for around 50 percent of total costs. This makes professional planning for a sound purchasing strategy all the more necessary.
Purchasers must take into account factors such as developments in the raw materials market and exchange rates. They also need to consider whether a supplier’s prices will have to be adjusted due to higher wage agreements. Fortune telling? Not at all! Trends can be identified using solid methods and incorporated into the purchasing strategy.
The foundation of strategic purchasing is, of course, transparent actual data that is projected into the future. What will future demand be? Are technical changes to products planned? Which conditions and price components can be influenced at all? Many prices are difficult to plan as a complete price. Practical tip: Break down the components of a product into individual parts, i.e., into an influenceable pure material price and the additional costs that are often dependent on environmental factors; this allows the purchasing department to demonstrate its negotiating skills right away.
Does sales planning provide useful demand figures? If not, purchasers can use historical values. This works particularly well for series manufacturers who have a relatively stable product portfolio. However, new parts do not appear in such a list, nor do bonus payments agreed with suppliers. And what happens to discontinued parts? This has to be done manually. In mature purchasing control systems, however, new parts can be added in just a few steps via an Excel import. Bonus payments agreed with suppliers are planned at the supplier level and therefore do not affect the individual part price.
Concrete purchasing planning also improves planning reliability for suppliers, enabling long-term partnerships.
Clean data, precise calculations – automated purchasing planning
An integrated purchasing control solution makes purchasing planning much easier. It allows you to plan quantities, price developments, and costs in detail and perform deviation analyses based on actual and planned quantities. A constantly updated forecast illustrates the extent to which the annual target will actually be achieved based on the current status and immediately reveals any undesirable developments. The purchasing control solution shows price changes during the year down to the material level with an impact on the current year (EBIT effect) and precisely quantifies the carry-over effects for the new year and the full-year effect. If the result deviates in an undesirable direction, further cost-cutting measures must be initiated or brought forward. With a purchasing controlling system, individual factors in the product groups can be easily changed – the system then automatically provides forecasts and shows the effects. Purchasing targets can thus be compared with actual data at any time. The target figures form the binding basis for budget planning for material costs. A purchasing control system enables transparent planning down to the last detail, as it is always executed in the background at the part level; nevertheless, an entire material class can be planned with just two clicks. This provides management with completely transparent planning.
Additional tip: systematic measurement control – plan, control, and measure all purchasing activities. Measurement controlling provides a precise overview, enables simpler and more accurate tracking of activities, and measures success. It transparently shows what savings can be expected and when. With systematic purchasing planning and stringent measurement controlling, purchasing makes a decisive contribution to the company’s results.
