Procuremet Essay

4762 Words Feb 6th, 2014 20 Pages
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Report Information from ProQuest
January 09 2014 16:51 _______________________________________________________________

09 January 2014

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Table of contents
1. How Procurement Excellence CREATES VALUE........................................................................................ 1 Bibliography...................................................................................................................................................... 11

09 January 2014

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Document 1 of 1

How Procurement Excellence CREATES VALUE
Author: Blascovich, John D; Markham,
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To deliver the additional value that CEOs now demand, supply management leaders are emphasizing innovation and growth, value chain optimization, risk management and supply continuity, and advanced cost management. They are also expanding the role and influence of supply management in their organizations. This article discusses what sets the leaders apart. When is cutting costs and improving quality not enough? "Now," say CEOs from around the world. A.T. Kearney's 2004 "Assessment of Excellence in Procurement" (AEP) study reveals that senior executives expect supply management to go well beyond its traditional role. Rather than focusing on price reductions, executives are challenging the organization to capture value from the supply market. This view represents a huge advance in their understanding of procurement's potential. In 1999, 28 percent of supply management organizations had goals aimed at value creation; in 2004, that figure rose to 66 percent. Top supply management practitioners are already delivering more value. The study's leaders are outperforming the pack in generating savings and driving these savings to the bottom line. (see Exhibit 1 on page 46.) The additional savings come in large part from reducing total cost of ownership, rationalizing specifications, and managing demand. In three of four procurement

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