Orpheus Blog - Procurement Intelligence

Indirect Purchasing: Transparency, potential analysis and performance measurement

In many companies, the purchase of so-called direct materials that are incorporated into the final products is part of the core business. These purchases make up approx. 70% to 85% of the purchasing volume within the manufacturing industry. All other purchasing categories, such as services, IT, marketing, etc., which are often referred to as “indirects”, make up the remaining 15% to 30% of a corporation’s purchasing volume that is controlled via indirect purchasing.

Calculate the benefits of transparency in purchasing in 6 steps

Big procurement successes are the payoff for arduous preparatory work. With internationally operating corporations, in particular, the first step is the recognition of the bundling potential across the group. This is only possible if the ‘same’ goods and services, as well as the shared suppliers, can be identified across all divisions, business branches and companies. This can only be achieved if the material (groups), suppliers and prices for the goods and services were extracted, merged and harmonized from the various information systems.

The added value in purchasing: What all constitutes cost savings and how is this measured?

Since the external expenditures of a corporation make up a large part of the costs, purchasing is faced with correspondingly high expectations to achieve cost savings. The financial perspective is assuming a major role and the added value in purchasing is gaining importance, not least because the pertinent systems and tools for the measurement of cost savings are gaining more and more possibilities and significance. Ultimately, the question of what the actual added value in purchasing is, and how this is measured in order to appropriately illustrate the success of the purchasing department and its part in the performance of a company, arises.

Big Data Analytics in strategic purchasing

For a few months now, the term Big Data has been a hot topic in the media. Yet what is really new with respect to well-known instruments such as SpendAnalysis and procurement controlling? Big Data in strategic purchasing primarily aims for a higher “analysis intelligence”. The objective is to obtain new, hitherto unknown, conclusions from the data.

5 proposals for truly sustainable purchasing success

A primary function of strategic sourcing is to reduce the purchase price of direct and indirect goods and services within a corporation. If nothing else, the success of this mission unfolds its impact in significant economic parameters of due diligence. On the one hand, more favorable purchasing prices contribute to improved profits. On the other hand, the available cash flow increases – the saved money is available for other business purposes.

Study: Procurement Performance Management today

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How to Introduce Successful Initiative Management in Procurement (Part 2)

In many companies, initiative management and controlling still only play a minor role. Orpheus set out to understand the reasons and “stumbling blocks” and has illustrated essential “design criteria” in this article that play a large role in the success and failure of initiative controlling and initiative management...

How to Introduce Successful Initiative Management in Procurement (Part 1)

Currently, many companies in procurement are still focusing on the automation of their operative procurement processes using SRM software modules, such as RfX, e-Procurement, Contract-Management, etc. However, on a strategic level in procurement and initiative management, there is at least a equally great potential for utilization ...

The 6 Savings Types

Procurement answers for a large cost block, especially in manufacturing companies or in trade enterprises. This cost block should be managed. Savings should be achieved and performance should be verifiable. In this article, we will present you with a fundamental system…

Measuring RFP Savings… But Doing It Right

In the procurement department, the relationship to the supplier is also a central focus with performance measurement. The services, prices, and quantities established in supplier agreements are essential parameters for the efficiency of procurement and its added value for the company...

Calculating and Analyzing Material Price Variance (MPV) - 6 Basic Rules

Material price variance – sometimes also referred to as material cost variance (MCV) – is an essential key indicator for spend managers. It is important because it is a central measure for the success of procurement relevant to profit and loss. It sets the current price for a material in relation to a reference price (e.g. average of the previous year) and measures the difference with the currently procured quantity…

Structure of a Strategic Spend Management System

Procurement departments are increasingly evolving away from being an order service to being a powerful strategic instrument within their company. Procurement departments are making more and more important decisions. However, there is still heavy resistance from the other departments. Unfortunately, procurement still takes place locally in complex, international corporate hierarchies without the central procurement department being informed about these procurements…

Optimizing Margins

Indeed it is possible – we can optimize our margins significantly easier and even better with transparent data. However, how do we create sustainable data transparency throughout all procurement data of the company? You will find out in the following article ...

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Orpheus Blog

In this blog you will find expert knowledge about initiative management and project management in strategic procurement. InitiativeTracker is a software for planning and monitoring your sourcing initiatives, controlling your procurement organization and measuring your procurement performance.

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