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SPECIALTY METALS INDUSTRY:
Purchasing Assessment / Business Process Redesign |
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Client: |
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A
$300-million division of a multi-billion dollar global manufacturer
of high-quality fine particles, dispersions and compounds. |
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Problem: |
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Need
to conduct an assessment of Purchasing to develop short-term recommendations
with a corrective action plan, and to develop a long-term strategic
direction. |
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Approach: |
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Analyzed
policies and procedures, inventory programs, systems, organizational
functions and processes, and conducted audits on requisitions and
purchase orders. Created process maps, identifying value-added and
non-value-added steps, and used tools such as FMEA, fishbone diagrams,
and cause-and-effect matrices to create a process improvement plan.
Assessed purchasing activity within IS, Finance, Manufacturing, Maintenance,
Capital Engineering and R&D and assessed the effectiveness of Purchasing
as a support function. Compared departmental knowledge and skill set
with a world-class purchasing organization. |
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Results: |
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Developed
short-term and long-term action plans to re-direct the focus of the
purchasing department from tactical to strategic. Recommendations:
Departmental / Functional Changes:
- Redefine goals and objectives, roles and responsibilities,
streamline purchasing procedures (remove non-value-added steps), utilize
information systems to full capability, define data-gathering methods
to measure historical internal transactions and conduct training programs
for users
- Increase use of e-procurement
- Implement plan to reorganize / restructure the purchasing
department
- Purchase order cycle time savings: 25-35% short term; 35-50%
long term
Business Strategy Changes:
- Develop supplier metrics and evaluation criteria, business-critical
RFQ, negotiations, supplier selection and SRM criteria
- Establish vendor managed inventory and consignment inventory
programs
- Cost savings: $2-4 million short term; $6-8 million long term
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