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'VALUE FOR MONEY FIT FOR PURPOSE' - A Procurement Perspective - The concepts of; 'Value for money fit for Purpose' are fundamental in Procurement management, because they assist in the market analysis and guide the decision making process. As a two part concept, Value for money and Fit for Purpose, firstly assesses or optimizes the cost-benefit relationship in a given procurement project or requisition order. Secondly, the concept ensures or verifies that the items or products being procured meet the objectives or specific needs of the customer. For example, given a procurement project, 'Value for Money' will seek to determine the amount of value to be gained in relation to the cost that will be incurred. At the same time, 'Fit for Purpose, will concentrate on ensuring that procured items (goods, services, materials or works) will indeed meet the specific needs as per customer requirements. Remember, Value for money fit for Purpose will be deemed successful only if Procurement will be successful on: - 1. Cost-effectiveness: Maximize the benefits, ensuring that the value generated far outweighs the cost incurred. Here, costing should go beyond the initial cost price, to including costs to be incurred over the product's life time - Life-cycle Costing. 2. Specifications and Technicalities: Ensuring that the product's technical specs in terms of performance and reliability levels satisfy the customer, end user in particular. Depending on the type of business or industry standards, there are several mathematical formulas and indices that can be used to determine 'Value for money and fit for Purpose'. They include: - Value for Money, Total cost of ownership, Performance metrics, Life cycle cost analysis, Fit for Purpose index. In all, a careful and well balanced approach will be needed if Procurement is to arrive at its intended destination via the Value for money fit for Purpose route. The product's functionality, quality and cost-effectiveness - long term, being the key focus areas in this regard. #ValueForMoneyFitForPurpose #ProcurementOptimization #SupplyChain https://lnkd.in/gh_EYFn

The Logistics function: what definition for what challenges ? The definition The Logistics function is given the mission of optimizing all of the company's physical and informational flows: What challenges? The importance of the Logistics function can be understood at several levels: upstream of the company: management of flows from suppliers within the company: inventory management, handling of components, management of informational flows downstream of the company: storage of products, transport to distributors and to customers. In terms of production, logistics determines the relationships between the different workshops and clearly conditions the pace and production deadlines. In terms of sales, logistics will have an impact on the deadlines for delivering products to customers, by limiting stock shortages as much as possible. In terms of finance, logistics, by optimizing flows and stocks (i.e. having neither too much nor too little stock), will reduce the company's costs. On a strategic level, the establishment of an efficient logistics function will enable the company to defend itself within the framework of the “chrono-competition”.

'VALUE FOR MONEY FIT FOR PURPOSE' - A Procurement Perspective - The concepts of; 'Value for money fit for Purpose' are fundamental in Procurement management, because they assist in the market analysis and guide the decision making process. As a two part concept, Value for money and Fit for Purpose, firstly assesses or optimizes the cost-benefit relationship in a given procurement project or requisition order. Secondly, the concept ensures or verifies that the items or products being procured meet the objectives or specific needs of the customer. For example, given a procurement project, 'Value for Money' will seek to determine the amount of value to be gained in relation to the cost that will be incurred. At the same time, 'Fit for Purpose, will concentrate on ensuring that procured items (goods, services, materials or works) will indeed meet the specific needs as per customer requirements. Remember, Value for money fit for Purpose will be deemed successful only if Procurement will be successful on: - 1. Cost-effectiveness: Maximize the benefits, ensuring that the value generated far outweighs the cost incurred. Here, costing should go beyond the initial cost price, to including costs to be incurred over the product's life time - Life-cycle Costing. 2. Specifications and Technicalities: Ensuring that the product's technical specs in terms of performance and reliability levels satisfy the customer, end user in particular. Depending on the type of business or industry standards, there are several mathematical formulas and indices that can be used to determine 'Value for money and fit for Purpose'. They include: - Value for Money, Total cost of ownership, Performance metrics, Life cycle cost analysis, Fit for Purpose index. In all, a careful and well balanced approach will be needed if Procurement is to arrive at its intended destination via the Value for money fit for Purpose route. The product's functionality, quality and cost-effectiveness - long term, being the key focus areas in this regard. #ValueForMoneyFitForPurpose #ProcurementOptimization #SupplyChain https://lnkd.in/dEw5VEW

Logistic challenges like environmental restrictions, delays, rising freight costs, sourcing difficulties, and labor shortages can make finding solutions daunting. Can your business withstand shocks and minimize disruptions while staying profitable? Optimization software may be the answer. Sign up for a free 2-week analysis and see for yourself! #logistics #procurement #supplychain #optimization #optimalanswers www.optimalanswers.com

What defines an effective negotiation excellence strategy, and how do companies ensure it delivers tangible results?   Unprecedented cost optimization for a leading logistics company shows how expanding the supplier base and using innovative negotiation tactics can achieve remarkable savings and high efficiency, even in the midst of market constraints.   Interested in learning more? Check out our detailed case study below! 👇 #CostOptimization #Logistics #SupplierManagement https://lnkd.in/gFWNHg8j

Navigating the complexities of shipping and logistics requires a partner equipped with the expertise and tools to streamline processes and maximize efficiency. That's where SOI shines, with our dedicated Life Cycle Management services specifically designed for the shipping and logistics industries. 🚚 From inventory management to maintenance planning, SOI covers all bases to ensure seamless, efficient, and cost-effective logistics solutions. Embrace the power of detailed analysis, strategic planning, and SOI's commitment to excellence. 🔗 Your path to optimized shipping and logistics operations starts here! 📈 💻 www.1soi.com 📩 info@1soi.com 📱 254.616.6600 #soi #shippinglogistics #lifecyclemanagement #efficiency #industryinnovation #logisticssolutions #inventorymanagement #maintenanceplanning #costeffectivelogistics #strategicplanning #optimization #supplychainexcellence #shippingindustry #logisticsindustry #soiexcellence #navigatecomplexity #streamlineprocesses #logisticsoptimization #shippingefficiency #logisticsmanagement

📦🔧 Mastering Material Management: The Backbone of Production Efficiency 🔧📦 Effective material management is crucial for optimizing the entire production process. By streamlining procurement, inventory, storage, and logistics, companies can reduce costs and meet customer demands more efficiently. Implementing quality control measures and leveraging technology can further enhance productivity and ensure consistent results. In today's competitive market, a strong material management strategy is not just beneficial—it's essential for success! #materialmanagement #supplychainexcellence #inventoryoptimization #costefficiency #technologyinsupplychain Full read here: https://lnkd.in/dJ-vvkqa

Preparing for the Future With ‘Extreme Scenario Planning’ https://lnkd.in/gqn8CjKT #warehousing #procurement #supplychain #logistics #logisticsmanagement #purchasing #strategicsourcing #supplychainmanagement #iipmr

Do you have a checklist or guidline to prepare your Freight Tenders?   There are things in our job that repeat frequently. If you are working in indirect procurement then Freight Tenders will be one piece of those repetitive projects.   𝗛𝗼𝘄 𝗱𝗼 𝘆𝗼𝘂 𝘁𝗿𝗮𝗰𝗸 𝘄𝗵𝗮𝘁 𝘆𝗼𝘂 𝗵𝗮𝘃𝗲 𝘁𝗼 𝗱𝗼?   A TODO List or Guideline can be a good instrument to avoid losing the overview or delaying the process because you forgot something.   Our brains are huge but do not underestimate how easily things can become forgotten in the daily rush.   The documentation of processes is helpful.   𝗖𝗿𝗲𝗮𝘁𝗲 𝘆𝗼𝘂𝗿 𝗼𝘄𝗻 𝗚𝘂𝗶𝗱𝗲𝗹𝗶𝗻𝗲   Think about your tenders to be handled during the year and create a guideline of things that need to be done.   Many topics are the same for all segments / modes of transport and some tasks will be specifically needed for the one or other transport mode only. With this clustering you can create an overall guideline plus mode-specific parts.   Make sure you involve the right people that can support the process.   Communicate the guideline to your team members, set a rough schedule and focus on keeping this schedule.   That way you can follow your "list" every year or whenever you repeat the project.   𝗞𝗻𝗼𝘄𝗹𝗲𝗱𝗴𝗲 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗯𝗿𝗶𝗻𝗴𝘀 𝗣𝗿𝗼𝗰𝗲𝘀𝘀 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝘆   It is clear you won't have all the steps in your mind because tenders are not your daily business.   A clear process definition will bring the following benefits:   1. You will not forget anything 2. You will stay in the timeline 3. By managing the knowlegde you will increase the process & company security   𝗛𝗮𝘃𝗲 𝘆𝗼𝘂 𝗰𝗿𝗲𝗮𝘁𝗲𝗱 𝗼𝘄𝗻 𝗚𝘂𝗶𝗱𝗲𝗹𝗶𝗻𝗲𝘀 𝗮𝗹𝗿𝗲𝗮𝗱𝘆?   Documentation is the "boring" part of the job but really important. Take your time to work on it.   You need some hints? Send me a PM ;)   #tendermanagement #procurement #logistics #freight

PROCUREMENT DIAGNOSTICS Procurement Diagnostics is a process of assessing the Procurement function in order to identify its current strengths and weaknesses. Procurement Diagnostics evaluates various procurement activities and in essence helps organizations in identifying areas of the procurement process in need of improvement. As such, several factors are evaluated during the Procurement Diagnostics process. These include: 1. Analysis of the existing systems, policies and practices of the Procurement function. This assists in understanding the general state of affairs in the Procurement function. 2. Benchmarking current systems, policies and practices with the best in the market. This helps in revealing gaps and other inefficiencies in the Procurement function. 3. Assessment of the existing continuous improvement mechanisms. Procurement Diagnostics reveal areas of weakness, therefore inspiring innovation and the integration of modern and advanced tools of trade, such as; risk-assessing, cost-saving and predictive analytics technologies. 4. Assessing Key performance indicators (KPIs), to ascertain the Procurement’s tangible value contribution to the organization. KPIs such as: - Contract compliance, - Supplier lead time, - Inventory turnover and - Cost savings, will indicate Procurement’s real value contribution to the organization. NB: ¬ Compliance and adherence to the negotiated, agreed upon and signed contractual terms, is a clear indication of Procurements excellence in the selection of disciplined, able and reliable suppliers. ¬ Shorter lead times indicate that Procurement has streamlined supply networks, a sign of good supplier engagement and collaboration end-to-end. ¬ High inventory turnover is a sign of excellence in the; planning, ordering and maintenance of stock that correspond to demand without excess. This leads to a reduction in carrying cost among other benefits. ¬ Cost savings, an indication of Procurement's sourcing excellence, which has a direct impact on the organization’s cash flow. Because, effective management of inventory reduces the amount of money tied up in stock, therefore frees up cash and other resources that can add value elsewhere. In all, Procurement Diagnostics assist organizations in the identification of gaps in the procurement, mitigates risks, enhances decision-making, reduces operational cost and leads to overall efficiency as well as higher productivity. There is no doubt that Procurement Diagnostics marks the point of breakthrough between old inefficiencies and new futuristic/more rewarding strategies. This explains why Procurement Diagnostics remains one of the first tasks Procurement managers embark on at their new place of employment. #ProcurementDiagnostics #ProcurementOptimization #SupplyChainManagement https://lnkd.in/gh_EYFn