In times of keen competition, gains in efficiency must not be paid with the price of limited service. In today‘s business ­customer orientation, especially for internal service functions such as purchasing, is written in capital letters. Global leaders among purchasing departments use specific measures to ­raise efficiency levels so that they can also enhance their customer ­orientation and promote the significance of purchasing as a whole for their own companies. How can this strategy be ­realized with efficient organizational forms and excellent system support?

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„We must make our purchasing activities more efficient so that we can lower our internal costs!“ This and similar recommendations are frequently heard these days. They are not wrong. But they do not encompass the full picture. Contrary to the statements made by many people, a high level of efficiency in purchasing has more substantial advantages than simply cutting back internal costs. Of course the cost factor is an aspect which, especially in our present age of economic doldrums, must be watched with an eagle eye. But purchasing efficiency means more. Here are some examples.

Efficiently conducted purchasing activities reduce the lead times in procurement. This ensures greater flexibility and enables ­faster responses to changes in external demand or internal reallocations. If the company is doing business on highly competitive sales markets, this is decisive for success.   The optimized processing of the purchasing and corresponding payment activities (procure to pay) makes it possible to optimize the free cash flow. This important key performance indicator, one which is the basis for assessments by analysts and can be decisive for a company‘s fate, is subject to direct influence by the purchasing department.

As a rule, efficiency in procurement is accompanied by process automation, securing the high quality of transactional and master data and assuring a high degree of transparency. This is of the greatest significance for strategic decisions. Moreover, transparency increases planning reliability among suppliers. Costs such as warehouse expenses decline along the entire supply chain so that more advantageous terms and conditions such as reduced prices and extended warranty obligations can be negotiated.