The final step in a comprehensive procurement strategy is establishing procurement performance standards and an environment dedicated to continuous improvement. The objective of this step is to leverage continuous improvement and performance measurement techniques to drive competitive advantage.
Communicate the value of continuous improvement
This activity requires that procurement organizations communicate the importance of the value of continuous improvement initiatives and stimulate individual and team contribution.
Establish clear performance benchmarks
This activity is concerned with the establishment of clear performance benchmarks accompanied by a review mechanism designed to track progress and ensure that recognition is given for achieving performance.
Train personnel in continuous improvement and performance management techniques
To respond to new challenges, the procurement organization must be provided with necessary skills, such as training in statistical quality techniques, problem solving, value analysis, and team building. The table outlines the focus of high performance procurement objectives.
Focus of High Performance Procurement Objectives
Relates to procurement’s prime objective of procuring defect-free product, materials, and services.
Assists procurement to identify supplier problems in products and delivery times that risk internal stock outs and increased costs for expediting.
Enables procurement to facilitate the smooth flow of goods and services in a cost effective, timely manner to continuously reduce product, process, and channel costs.
Assists procurement to leveraging information technology superiority that will provide supplier and delivery visibility and will remove unnecessary process redundancies.
Enables purchasers to assist the entire organization to increase the velocity of getting new products to market, removing blockages clogging the flow of inventory through the supply channel, and delivering an exceptional customer buying experience.