Measuring purchasing’s performance
29 August 2012
Q: I work for a contract electronics manufacturer. To win business, we need to quote competitively and are dependent on suppliers for competitive material pricing. Once we start making the product, there is little room for further purchase cost reduction.
A: Ivan Berkes, principal at management consultancy AT Kearney, writes: This is a common question for businesses where the price dynamics in underlying supply markets and changing design specification do not allow for development of proper cost benchmarks.
In these cases, the primary objective is usually the management of the gross...