Strategic Process 1 Insourcing/outsourcing decision General description Various aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Making a strategic choice between insourcing (in 1.1 Documentation Records of the decision-making process used to reach a specific decision. Little or no Little evidence of Recording of the Evidence of a Explicit house) or outsourcing. Outsourcing refers to evidence of a a structured reasoning structured recording of processes that were originally performed in house, structured implementation behind this implementation results based on but are now carried out by an external supplier (for decision making process objective process evaluation a more detailed definition and examples refer to process analysis the MSU+ model) 1.2 Strategy Is the decision based on a long term strategy or short term objectives. Short term Short and long objectives term strategy 1.3 Cost/benefit Complete a costs/benefits analysis on the basis of political and/or legal risk, time, costs, capacity, know-how, etc. required to Decision based Decision based analysis carry out the activities within the organisation. on a limited on integral set of number of evaluation criteria evaluation criteria 1.4 Information Use of internal and/or external information for decision making (external information such as that originating from suppliers or Internal And external Benchmark general market information) information information studies if necessary 1.5 Team composition Functional or multi-disciplinary team that will reach a decision (a multi-disciplinary team includes employees from both Multi-disciplinary Multi-disciplinary purchasing and other disciplines) team decision making process that includes others outside the organisation 1.6 Supplier Use of market research and assessment to identify potential suppliers (in the case of insourcing, including associated public Do short and Identification of organisations) long term potential strategy and suppliers on the capacities basis of market involve the research and current supplier supplier in the decision evaluation (also making process? take into account the strategy and capacities of potential suppliers) 1.7 Approach to From ad hoc decision making to a more structured decision making process, with systems in place to deal with various aspects Ad hoc approach Systematic decision making including risk management. to decision decision making making process process depends on specific key personnel 1.8 Primary/secondary Differentiation of core and non-core competencies Decision making Takes into Evaluation of core activities process based account current competencies on the on differentiation and future basis of cross-border between core requirements insight (internal, and non-core clients, suppliers competencies and other public organisations) 1.9 Assessment/evalu Comparing actual performance against objectives using measuring instruments and performance indicators. This should also Few or no Evaluation Formal ation process include the methods by which outsourced activities are monitored and supervised. measuring process of all evaluation instruments/perfo cost elements process based rmance before and after on objectives indicators insourcing/outso (including (before/after) urcing. analysis of Assessment initiatives and based on corrective objectives measures where necessary) 1.1 Implementation Structured implementation of insourcing or outsourcing. Implementation is structured if the outsourced/insourced tasks are clear Ad hoc crisis Little evidence of Implementation Formal 0 process for the organisation and the supplier and have been recorded in outsourcing/insourcing agreements. The outcomes for the related a structured process is implementation internal organisation must also be clear. implementation implementation structured. process and the process Defined outcomes for the outsourcing/inso internal urcing organisation are agreement clear available. Some measurable objectives have been defined. 1.1 Involvement of The degree to which purchasing expertise is involved in the decision making process, implementation and evaluation Purchasing Purchasing Purchasing 1 purchasing experts expertise not expertise expertise is also involved or only involved as involved in in/during information general implementation source with commercial regard to considerations suppliers 1.1 Communication Communication about insourcing and outsourcing with internal and external stakeholders No Communication Communication An extensive And 2 communication only within the between communication communication project departments, plan that on within the entire includes various insourcing/outso organisation internal urcing with the stakeholders suppliers market 1.1 Legislation and The extent to which there is evidence that, when making a decision on insourcing or outsourcing, legislation and regulations No evidence of Some evidence Evidence of Evaluation of 3 regulations such as EU tendering guidelines are sufficiently taken into account (appropriate and in accordance with the law) adequate of attention to compliance with compliance with attention to legislation and legislation and legislation and legislation and regulations regulations regulations regulations within framework of the insourcing/outso urcing decision daa1e8ec-203c-46bb-be69-48dbdd4b0e2f.xls 1.1 External The extent to which partnerships with external parties have been considered (including public private partnerships, but also Little or no Careful Formal Decision making 4 partnerships between authorities if outside the legal entity of the organisation). A considered decision is made on the basis of a clear attention to consideration considered about understanding of various insourcing/outsourcing options and understanding of the most suitable option, using specific methods external has been given decision making partnerships and approaches. partnerships to external on whether or with suitable partnerships not to form parties is partnerships evaluated with suitable parties Summary The process Little or no Systematic, As 2, but based As 3, but based As 4, but As 5, where As 6, and there There is a formal As 8, but there is Multi-disciplinary does not apply evidence of the multi-disciplinary on internal and on current and decisions on decisions on is evidence of a decision making also a formal decision making to the presence of a decision-making external future insourcing/outso insourcing/outso structured process for high level process that organisation or structured process around information. requirements: uring are not urcing have implementation insourcing/outso process for transcends the part of the decision making core and non- Purchasing is decisions have solely based on clearly been process. Clearly urcing and a assessing/evalua organisation: organisation process for core integrated in the clearly been knowledge of the based on defined formal ting the results assessment of the insourcing or competences, decision making taken on the short/long term cost/benefit outsourcing implementation on the basis of core competences outsourcing. An based on process as an basis of the strategy of analyses that contracts are process. The objectives with no distinctions ad hoc approach internal information organisation's current suppliers use an available that outcomes for the (including between the various is employed. information, source for strategy and with and their integrated set of cover all relevant internal analysis of parties (internal, Specific crisis- cost/benefit knowledge of the knowledge of the skills/qualities, assessment aspects. Some organisation are initiatives and clients, suppliers). related decision analyses based current supplier short and long but also on criteria. There is terms of clear. In any corrective making and on a limited base. Evidence term strategy of those of potential a clear picture of reference have addition, the measures). implementation number of of compliance current suppliers suppliers. all costs and been formulated. extent of Results are may assessment with legislation and their Potential there is a compliance with explicitly occasionally criteria and short and regulations. skills/qualities suppliers have process for legislation and recorded. take place term goals. Little Careful (with the been identified evaluating all regulations is Communication depending on evidence of a consideration possible addition by purchasing cost elements evaluated to on the key persons structured has been given of benchmark market research before and after enable decisions insourcing/outso involved. Driven implementation to external studies). and supplier insourcing/outso to be taken urcing also takes by capacity process. partnerships. Communication assessment. urcing. The about place with the considerations. Communication takes place There is reasoning insourcing/outso suppliers market. Few or no only takes place between the evidence of behind this urcing. Decision measuring within the departments compliance with objective making about instruments/perfo project. There is within the total legislation and analysis has partnerships rmance little evidence of organisation. regulations and been recorded. with suitable indicators attention to formal There is parties is also (before/after). legislation and considered evidence of clear evaluated. Purchasing regulations. decision making objectives and expertise is not takes place on measurement employed or whether or not to take place on the only at the form basis of these. implementation partnerships Purchasing is stage. Little or with suitable also involved in no external parties. general communication commercial takes place with considerations. stakeholders. No A detailed evidence that communication attention is paid plan exists that to legislation and includes the regulations. various internal stakeholders. daa1e8ec-203c-46bb-be69-48dbdd4b0e2f.xls Strategic process 2 Commodity/purchase family strategy development General description Aspects Notes 1 2 3 4 5 6 7 8 9 10 Define the organisation's requirements and 2.1 Supplier market Using external information such as market research, market consultation and benchmarking to draw up specifications. No or ad hoc Thorough Benchmarking Formal risk formulate an appropriate purchasing strategy for analysis supplier market understanding of assessment of each commodity/purchase family. research structure and suppliers market development of the suppliers market 2.2 Internal client Using internal information to define requirements. Reactive Agreement Pro-active Intensive analysis approach and reached approach collaboration consultation the reactively (commitment) internal client 2.3 Strategy Is the definition of purchasing requirements based on a long term strategy or short term objectives? No or very little Short term focus Focus on long There are evidence of the and term partnerships existence of a consideration is across strategy for each given to the organisations commodity/purch market approach and various ase family innovative forms of purchasing and tendering have received formal consideration. 2.4 Purchasing flows Application of purchasing flows and risk analyses Purchasing Purchasing Purchasing and risk analyses flows and risk flows and risk flows and risk analysis with analysis with analysis with respect to price respect to cost respect to and volume process 2.5 Documentation Documentation of strategic commodity/purchase families and product requirements No documented Documentation Documentation Documented Explicit strategy for each on team showing process for recording of commodity/purch meetings understanding of developing a results that have ase family available suppliers market strategy for each been achieved available commodity/purch and improved on ase family . 2.6 Decision making Formalisation of decision making process No obvious Managers define Formal and process decision making objectives and structured process coordinate the process for decision making developing a process strategy for each independently of commodity/purch teams ase family 2.7 Communication Communication with internal and external stakeholders on commodity/purchase families (consultation and coordination) No Some evidence Regular communication of consultation with with direct communication internal and stakeholders with direct external (as stakeholders. applicable) stakeholders on development of a strategy for each commodity/purch ase family. 2.8 Team composition Functional or multi-disciplinary team, which takes decisions. Multi-disciplinary means that employees work within different Multi-disciplinary departments of the same organisation teams have been put in place to develop a strategy. Managers thoroughly assess whether teams have the right competencies. 2.9 Procurement Identification of commodity/purchase families on the basis of procurement models (such as Kraljic Portfolio Analysis and the 80- No deliberate Deliberate use of Benchmark models 20 rule), differentiation of commodity/purchase families is aligned to the strategy use of procurement studies are procurement models taken into models account in developing a strategy for each commodity/purch ase family 2.1 Identification of Extent to which product definition limits have been considered on the basis of information on suppliers and internal/external Product Knowledge of Strategy also Both internal Strategy based 0 product clients. Includes preparing a programme with respect to the function of the product or services to be purchased, the technical requirements are skills, based on and external on development requirements requirements, logistics specifications identified performance and commodity/purch (client) plans for internally results of both ase family requirements technology that current and requirements have been potential suppliers identified by agreed and clients clustered within the organisation and with the suppliers market. 2.1 Purchasing Drawing up purchasing plans as part of the purchasing policy including tasks, responsibilities and information as well as Detailed plan of Including 1 planning financial structures and budgets. action is specific, available. measurable, Critical path has time-bound been made (SMART) and explicit. Little pioneering evidence of objectives, in pioneering line with objectives organisational and purchasing policy. daa1e8ec-203c-46bb-be69-48dbdd4b0e2f.xls 2.1 Evaluation of Evaluation of (product) requirements with respect to quality, cost, logistics, technology, service, the environment, etc. Formal Structured Continuous 2 results evaluation pursuit and evaluation of the process for evaluation of tendering strategy. prioritising all results, relevant including requirements corrective actions 2.1 Legislation and Is there is evidence of sufficient attention to legislation and regulations, such as EU tendering guidelines (appropriate and in There is no Some evidence Legislation and Legislation and The way in 3 regulations accordance with the law), with attention to the risks associated with purchasing processes arising from regulations. evidence of of attention to regulations are regulations are which the attention to legislation and taken into complied with. organisation legislation and regulations account complies with regulations. legislation and regulations is evaluated. Summary The process There is no Multi-disciplinary As 2, but the As 3, but also Formal, As 5, but the As 6, but As 7, there is As 8, benchmark As 9, formal risk does not apply process for teams have strategy for each based on the structured and strategy is based including intensive studies are assessment of the to the developing a been put in commodity/purch requirements for documented on development specific, collaboration taken into suppliers market is organisation or strategy for each place to develop ase family is also the process for plans for measurable, with internal account in the an integral part of the part of the commodity/purch a strategy for based on a commodity/purch developing a technology that time-bound markets to draw strategy commodity/purchase organisation ase family. No or each thorough ase family that strategy for each have been (SMART) and up the strategy development family strategy. very little commodity/purch understanding of have been commodity/purch agreed and pioneering resulting in a process. Continuous evidence of the ase family. the structure and identified and ase family based clustered within objectives, in high degree of evaluation of the existence of Managers have development of agreed with the on both internal the organisation line with commitment. tendering strategy commodity/purch been appointed the suppliers internal client. and external and with the organisational There is regular takes place. ase family with the role of market The focus of the (customer) suppliers and feedback/agreem Identification and strategies within formulating the (documented), strategy is on requirements, market. There procurement ent on the pursuit of the purchasing team objectives, including the the long term. including a are partnerships policy. An strategy for each improvements in the department. No coordinating specific situation Legislation and formal across analysis of commodity/purch development of documented decision making on the ground in regulations are evaluation organisations. purchasing flows ase family with tendering strategies strategy. about teams, the business, taken into process for Various and risks takes the most takes place. Supplier market thoroughly skills, account when prioritising all innovative forms place for the important research does assessing the performance and determining the relevant of tendering process. internal and not take place or competences of results of both tendering requirements. have received Structured possibly external takes place on teams to ensure current and strategies. There There is a formal pursuit and stakeholders. an ad hoc basis. that they match potential is also analysis proactive consideration evaluation of Inter- No the aims of the suppliers. of purchasing approach (contractual results relationships communication strategy and Procurement flows and risk on towards the structures, (including and with direct arranging models are also the basis of internal market selection criteria). corrective mechanisms in stakeholders participation by used for the costs. when actions). There the suppliers and no the right different determining is explicit market are taken deliberate use of individuals. commodity/purch strategy. recording of into account in procurement There is ase families. Detailed plan of results that have the tendering models to draw evidence that action is been achieved strategy. The up a strategy. team meetings available, which and improved on. degree to which There is no take place. includes tasks, the organisation evidence of Strategy responsibilities complies with attention to development for and dates. The legislation and legislation and each critical path is regulations is regulations. commodity/purch made explicit. evaluated. ase family is Some evidence based on of internally communication defined product with direct requirements. stakeholders. This information Little evidence of is obtained on pioneering the basis of objectives. reactive Legislation and consultation with regulations are the internal complied with. customer. The focus is on the short term and consideration is given to the market approach. Purchasing flows and risks are analysed on the basis of price and volume. There is some evidence of attention to legislation and daa1e8ec-203c-46bb-be69-48dbdd4b0e2f.xls Strategic process 3 Supply base development and leveraging General description Aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Supply base development and leveraging is the 3.1 Supplier selection The existence of a supplier selection process. This means that supplier selection criteria and a formal evaluation procedure need Supplier Formal and Formally process of determining the right number and most to be defined. Examples of criteria include solvency requirements, being able to guarantee nationwide cover, turnover volume, selection is documented documented suitable suppliers for the organisation and availability of certificates. These are all used to draw up a long list of suppliers. based on price supplier process for ensuring that the supply base is up to date. and availability selection supplier process based selection based on current on future requirements of requirements the organisation 3.2 Evaluation of The way in which suppliers are evaluated. This includes monitoring, analysis, quality assessment, cost and purchasing risk Qualitative Simple supplier Supplier Supply base has Advanced Regular Performance of the existing suppliers associated with current suppliers. perception of assessment assessment been extensively supplier assessment of correct number/type supplier system (quality, system, analysed on the assessment strategic of suppliers is performance and delivery supplemented basis of system available suppliers maximised on the basic evaluation reliability of by simple purchasing with objective (assessment of basis of of costs and strategic supplier turnover and assessments capacity and differentiated purchasing risk. suppliers) classification purchasing risk including updating the commodity/purchase system to communication of supplier's profile) family strategies classify their performance suppliers to suppliers and according to discussion of performance improvement programmes 3.3 Team composition The degree of multi-disciplinary collaboration in selecting and drawing up contracts with suppliers. Multi-disciplinary involvement 3.4 Organisational Understanding of current and future requirements of the internal organisation Clear picture of Good requirements the current and understanding of future the requirements of organisation's the organisation requirements in respect of the supplier base 3.5 Suppliers market Supplier market analysis carried out to allow suppliers to be evaluated and selected Ad hoc supplier Fundamental analysis market research supplier market research 3.6 Supplier Differentiation of suppliers as strategic and non-strategic on the basis of (supplier) procurement models Where Differentiation Supplier Information Supply base differentiation differentiation not yet aligned differentiation on available to development and takes place, to (purchasing) the basis of strategic leveraging on the suppliers are analyses that procurement suppliers: status basis of categorised as have been models (analyses) of the supply differentiated strategic and carried out base, supplier commodity/purchase non-strategic performance and family strategies initiatives to bring about improvements 3.7 Supply base Plan to improve the supplier base by taking specific measures. No or few Supply base Differentiated Improvement Clear development initiatives for development supplier base programmes are understanding of supply base and leveraging management in place current and development plan based on process based on future and leveraging supplier procurement capacities/skills assessment models of suppliers on system the basis of regular assessment 3.8 Differentiated policy Degree to which the purchasing policy addresses the differences between the various suppliers. Does the purchasing policy Policy does not Differentiated recognise that there are different types of suppliers (e.g. on the basis of Kraljic) and that they need to be treated differently. address the purchasing policy difference on the basis of between differentiation strategic and using non-strategic procurement suppliers or models does so to a limited extent only 3.9 Documentation Documenting of decisions, analyses carried out on the basis of procurement models and/or research related to supplier base Little or no Documentation Documented Evidence that the Documented development evidence of a of analyses in proof of approach is purchasing differentiated the form of differentiated yielding results market research policy for purchasing strategy towards and objectives are strategic and models available suppliers being achieved non-strategic suppliers. 3.1 Communication The degree to which communication takes place on the supplier base. Little evidence of Communication 0 formal about communication performance with about the suppliers and supplier base discussion of with improvement stakeholders. programmes 3.1 Legislation and Is there evidence of compliance with legislation and regulations such as EU tendering guidelines (appropriate and in accordance No evidence of Some evidence Evidence of Evaluation of 1 regulations with the law) when selecting and entering into contracts with suppliers. With regards European Tender Regulations, prior attention to of attention to compliance with compliance with reporting, observance of the correct procedure and reporting of the award result are of particular importance. legislation and legislation and legislation and legislation and regulations regulations regulations regulations Summary The process Supplier There is a As 2, but a As 3, but with a As 4, but the As 5, but with As 6, but an As 7, and there As 8, but with There is a does not apply selection is formal, simple supplier supplier supply base has clear evidence of advanced supplier is a formally the opportunity differentiated to the based on price documented measurement measurement been extensively a differentiated measurement documented to invest time strategy for each organisation or and availability. supplier system is used system and a analysed on the supply base system is also process for and resources in commodity/purchase part of the There are no selection to measure at simple supplier basis of management used. This system supplier fundamental family (at least score organisation. initiatives for process based least the quality qualification purchasing process. This is covers both selection based supplier market 7 in element 2) for supply base on the current and delivery system that turnover and based on current products on future research the purposes of development requirements reliability of supports the purchasing risk. analyses drawn and a new requirements. In (starting with a supply base and leveraging, and capacities of strategic supply base Documentation from procurement product and addition, regular good development and or supplier the organisation. suppliers. Little development is available in models. process assessment of understanding of leveraging and to selection is Little or no evidence of and leveraging the form of Documented development all strategic organisational maximise the based to a evidence of a formal plan. analyses based proof of process. The suppliers takes requirements performance of the limited extent on differentiated communication on procurement differentiated criteria have been place (e.g. and the supply correct number and the qualitative policy for on this subject models. Little strategy and weighted in assessment of base). The type of suppliers. perception of strategic and with evidence that practice towards accordance with capacity and planning and suppliers' non-strategic stakeholders. differentiation suppliers. the organisation's updating the implementation performance and suppliers. Ad between policy, multi- supplier's of purchasing a basic hoc supplier suppliers takes disciplinary profile) with the market research evaluation of market research place on the involvement and aim of obtaining has been clearly costs and takes place. basis of these objective and keeping a documented. purchasing Some evidence analyses. There measurements. clear, up to date risks. Suppliers of attention to is evidence of There is evidence picture of the are categorised legislation and compliance with that the approach supplier and his as strategic or regulations. legislation and is yielding results current and non-strategic. regulations. and objectives are future capacity No evidence of being achieved. and skills (in attention to This information is relation to the legislation and communicated to current and regulations. suppliers and future programmes for requirements of improvement are the regularly organisation). discussed. The Evaluation of following compliance with information about legislation and current regulations. requirements and skills is available to all strategic suppliers and the main parties involved: status of the supply base, supplier performance and initiatives to bring about improvements. Strategic process 4 Developing and managing strategic supplier alliances General description Aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Developing, managing and improving alliances 4.1 Procurement Relates to descriptions of the requirement for and definition of supplier alliances included in the purchasing policy (strategic or There is a formal with strategic suppliers based on a professional, policy non-strategic). The definition includes terms such as mutual dependence and establishment of mutual trust definition in the transparent approach. procurement policy stating the suppliers with whom a strategic alliance should be formed and/or developed. 4.2 Evaluation Formal process in place for intermediate evaluations of the criteria and objectives for each supplier relationship in accordance There is a formal Open book Clear evidence process with the purchasing plan. This process also covers contract administration and contract management. Contract administration process for policy to share of achievement covers the definition, storage and updating of contract data in order to highlight and implement specific actions. Contract recording the cost calculations of goals and management refers to the optimum utilisation of the supplied products and services that are part of 1 contract criteria and and cost improvement in objectives for breakdowns results each alliance in accordance with the procurement plan and the organisation's objectives. 4.3 Documentation Documentation of decision making processes with respect to selection and contracting to suppliers Documented Documentation Clear evidence and structured showing that a of an ambitious process for supplier alliance agenda for identifying, programme is improvements assessing and being developed selecting potential suppliers 4.4 Collaboration The way in which collaboration with (critical) strategic suppliers takes place Little evidence of If relevant, Senior If applicable, the Joint terms of Costs analysed Continuous Formal agreement with supplier joint formulation contracts are in management strategic reference have in conjunction evaluation of the and mutual plans for of objectives place for most from both sides supplier been formulated with supplier. alliance in the the future in the area strategic suppliers are involved in relationship has for current Open book light of the of technology, developing and been integrated projects. Some policy in order to intended objectives and managing into the "Product objectives have share cost objectives strategies. Open alliances. Role process been defined structure and sharing of information separation takes innovation (PPI)" jointly and there calculations place and process is a joint across the entire purchasing planning value chain expertise has a process. No separate role evidence that within the strategies for the relationship. future are geared to one another 4.5 Improvement Programme to develop supplier alliances and performance, including integral cost analyses and benchmarking Joint (with Integral costs Ambitious joint Joint (with programmes suppliers) and processes (with supplier) supplier) training improvement have been agenda for programme has programmes are analysed improvements been formulated still in their has been drawn infancy up on the basis of benchmarking 4.6 Communication Communication channels between the organisation and the supplier. Little evidence of Supplier Open existence of alliances communication with structured occasionally supplier communication form an item on channels the agenda for the management team. Communication within the organisation takes place on a formal basis 4.7 Legislation and Is there evidence that legislation and regulations are sufficiently taken into account when developing and managing supplier No evidence of Some evidence Evidence of Evaluation of regulations alliances? attention to of attention to compliance with compliance with legislation and legislation and legislation and legislation and regulations regulations regulations regulations Summary The process There is a formal There is a As 2, and As 3, and senior As 4, (if As 5, joint terms As 6, the integral As 7, there is As 8, a joint As 9, formal does not apply definition in the documented and contracts are management applicable) the of reference costs and clear evidence (with supplier) agreement and to the procurement structured available (if from both sides strategic have been processes have that an training mutual plans for the organisation or policy stating the process for relevant) for most are involved in supplier formulated for been analysed ambitious joint programme has future in the area of part of the suppliers with identifying, strategic developing and relationship has current projects. jointly. Open (with supplier) been formulated. technology, organisation. whom a strategic assessing and suppliers, managing been integrated Some objectives book policy to agenda for Clear evidence objectives and alliance should selecting including alliances. Role into the "Product have been share cost improvements of achievement strategies. be formed potential documentation separation takes process defined jointly breakdowns and has been drawn of goals and Information on future and/or (strategic) showing that a place and innovation (PPI)" and there is a calculations up on the basis improvement in products and developed. suppliers based supplier alliance purchasing process. There joint planning across the whole of results. technical There is a formal on defined programme is expertise has a is evidence of process. No supply chain. benchmarking. developments are process for criteria (as being developed. separate role compliance with evidence that Continuous openly shared. recording the defined in 1.). within the legislation and strategies for the evaluation of the criteria and There is little relationship. regulations. future are alliance in the objectives for evidence of the Supplier geared to one light of the each alliance in existence of alliances another. intended accordance with structured occasionally objectives. the procurement channels of form an item on Evaluation of plan and the communication the agenda for compliance with organisation's and the joint the management legislation and objectives. No formulation of team and joint regulations takes evidence of objectives. (with suppliers) place. attention to Some evidence improvement legislation and of attention to programmes are regulations. legislation and still in their regulations. infancy. Communication between the various levels in the organisation is organised on a formal basis. Strategic process 5 Optimisation of product/process innovation and development General description Aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Making the most effective use of the knowledge 5.1 Supplier market Research into the supplier market and the utilisation of technical know-how available in the market. In-depth Extensive supplier available in the market for the purposes of research knowledge of market research, developing new products and processes. suppliers market ongoing analysis of relevant sectors of industry 5.2 PPI policy and PPI = product/process innovation. A PPI policy is in place. Role of purchasing described/defined in PPI policy. Policy also No or limited Explicit decision procedures indicates how specific client requirements and needs should be handled. application of making on PPI policy and innovation or procedures development projects 5.3 Purchasing Employee involvement in purchasing function when creating products and services Role of Purchasing involvement purchasing and involved in PPI suppliers is from (pre) defined in PPI development policy (if phase available) 5.4 Supplier selection Supplier selection in line with PPI policy Selection of Overview of strategic suppliers based suppliers available on requirements for each technology defined in cluster strategic process 2 and in line with policy and project 5.5 Evaluation of Evaluation of supplier processes More thorough supplier processes assessment of suppliers' processes only if necessary 5.6 Evaluation of Evaluation of supplier performance on the basis of written agreements. Supplier Formal supplier performance performance is evaluation measured and process for compared assessing against development expectations. projects with Because it is suppliers difficult to assess innovative aspects, an advanced supplier assessment system is required to demonstrate achievement of goals and improvement in results 5.7 Corrective action Planning and implementation of corrective action on the basis of supplier performance evaluation results Corrective Programmes for measures improvement in planned and the future are implemented defined on the basis of evaluation 5.8 Decision making Decision making process on how to integrate suppliers in the innovation process Formal decision process making process to determine the best time and way to involve the supplier in the process 5.9 Project objectives Existence of project objectives (incl. milestones) Clear project objectives that have been translated into purchasing and supplier objectives 5.1 Collaboration with Collaboration with supplier including contents of contract (confidentiality statement, intellectual property rights, etc.) Little of no Contract and Development If relevant, 0 supplier evidence of terms of contracts, in physical supplier reference have which objectives presence of the integration into been drawn up for the supplier suppliers' product process to a limited extent have been developers in innovation (PPI) formulated, are the in place organisation's development department 5.1 Communication Communication on improving product and process innovation and development with suppliers and other disciplines within the Regular Open book Discussions on 1 organisation meetings policy on direction of joint planned. Multi- sharing of technological disciplinary and knowledge and research multi-level development communication plans with suppliers 5.1 Multi-disciplinary Collaboration with other disciplines within the organisation Project 2 approach objectives defined across boundaries of different disciplines 5.1 Use of IT systems Interlinked internal/external information systems to facilitate the exchange of information and to save time and money (financial Interlinked 3 IT, general information and e-procurement systems) internal/external information systems (EDI, databases) to facilitate the exchange of information to save time and money 5.1 Legislation and Is there evidence that legislation and regulations are taken into account when optimising product and process innovation and No evidence of Some evidence Explicit attention Checks for Effective 4 regulations development (appropriate and in accordance with the law)? attention to of attention to to compliance compliance with compliance with legislation and legislation and with legislation legislation and legislation and regulations regulations and regulations regulations regulations embedded in the achieved by procedures means of analysis and evaluation of procedures Summary The process Little or no As 1, explicit As 2, there is a As 3, there is a As 4, clear As 5, and As 6, the As 7, an open As 8, interlinked As 9, an overview of does not apply evidence of decision making good knowledge formal decision project regular meetings supplier's book policy with internal/external strategic suppliers is to the supplier on innovation or of the suppliers making process objectives have have been performance is regards to information available for each organisation or integration into development market and to determine the been formulated planned. The measured and sharing systems (e.g. technology cluster part of the product process projects takes selection of the best time and (including time, project compared knowledge and EDI, databases) based on extensive organisation. innovation (PPI). place. There is supplier is way to involve costs and objectives have against development facilitate the supplier market No or limited use clear evidence explicitly based the supplier in quality) that been expectations. plans is exchange of research, continuous of PPI policy and that Purchasing on the PPI. Contract have been communicated Relevant pursued. information to research into procedures, in is involved in requirements and terms of translated into and defined corrective Effective save time and relevant sectors of which (if PPI from the defined in reference have purchasing and (more than just measures are compliance with money. There is industry and available) the (pre- process 2 and is been drawn up supplier the product planned and legislation and a formal discussions about role of )development in line with the to a limited objectives. functionalities) at implemented. regulations evaluation the direction of joint procurement stage of projects. policy and the extent (as a Development various levels of There is an achieved by process with technical research. and suppliers is Some evidence project. A more minimum, contracts have the organisation advanced means of suppliers for described/define of attention to thorough confidentiality been drawn up and beyond the supplier analysis and evaluating d. No evidence legislation and assessment of statements and in which the boundaries of measurement evaluation of development of attention to regulations. the suppliers' guidelines objectives for the the different system for procedures. projects and legislation and processes only relating to supplier have disciplines. If supplier defining regulations. takes place if intellectual been formulated. relevant, performance in programmes for necessary. property rights). Checks for arrangements PPI (this is improvement in There is explicit compliance with are made for the because the future. attention to legislation and physical measuring compliance with regulations for presence of the innovation is legislation and optimising suppliers' difficult). Clear regulations in product and developers in evidence of order to optimise process the achievement of PPI. innovation and organisation's goals and development are development improvement in embedded in the department. results. procedures. Strategic process 6 Supplier integration into the order fulfilment process General description Aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Coordinate/optimise internal and suppliers' 6.1 Supplier integration The integration of the supplier in the order fulfilment process to use this process to maximum effect. Little or no Supplier is operational management, i.e. take contracted evidence of involved in supplier processes into account in internal supplier process of processes. This relates to the optimisation of all integration optimising repetitive, operational processes (operational operational purchasing). Optimisation is achieved by reducing purchasing turnaround times, using capacity to maximum effect, improving collaboration within the organisation, decision making processes and communication. 6.2 Multi-disciplinary Collaboration within the organisation, for example between those who define requirements, the finance department, logistics, Internal multi- Teams with Forces joined Best use of collaboration specific experts and purchasing, and collaboration between the purchasing department and suppliers in order to coordinate disciplinary client and and integrated qualities and demand with the suppliers' capacity collaboration supplier across the entire skills is made representatives supply chain to throughout the improve entire supply planning, stock chain levels, invoicing, etc. 6.3 Communication Formalisation of communication within the organisation, with suppliers and clients Formal internal Automated Terms of Communication Information communication (production reference only with (strategic) system that structure planning and) discussed suppliers on enables the coding system to internally (automated) exchange of optimise internal requirement information exchange of forecasts across the entire information (demand) supply chain including the client (e.g. using EDI) 6.4 Documentation Recording of decisions taken with respect to the order fulfilment process and analyses that formed the background to these Evidence that Strategic Documentation Evidence of decisions terms of suppliers are of evaluation effective design reference have clearly involved process of systems and been formulated in planning processes to ensure maximum utilisation of qualities and skills in the supply chain 6.5 Planning process Improvement of product/service delivery requirement planning Attempts to Requirement improve planning requirement process based planning on forecasts process internally 6.6 Improvement plan The extent to which the purchasing plan focuses on optimising the logistics process and reducing transaction costs, for example Terms of Proactive Action and Focus on Improvement by reducing turnaround times, decreasing the number of logistics process steps, reducing stock levels and order times reference in process to implementation effective design programme at world purchasing plan reduce the plans to reduce of systems and class level to shorten number of steps stock levels, processes and turnaround in the logistics order times and the use of e- times, etc. process, the turnaround tools and other number of times, and to innovative forms invoices, the improve internal amount of stock, accounting etc. procedures 6.7 Evaluation process Assessing the actual situation and analysing the differences between the plan and the actual situation (including the financial Process for Benchmarking of the plan in the budget) evaluating results entire supply chain Summary The process There is little or As 1, there is an As 2, there is As 3, there is As 4, there is a As 5, there is As 6, an As 7, forces are As 8, there is Benchmarking of the does not apply no evidence of automated evidence that evidence that proactive evidence that information joined and clear evidence entire supply chain to the supplier (production terms of (strategic) process to teams with system is in use integrated that the best use resulting in an organisation or integration into planning and) reference have suppliers have reduce the members from that enables the across the entire of qualities and improvement part of the the order coding system to been formulated, been integrated number of steps the customer's exchange of supply chain skills is made programme at world organisation. fulfilment optimise the e.g. to shorten in the in the logistics and the information (contractors/clien throughout the class level. process. There internal turnaround times requirement process, to supplier's side across the whole ts) to improve entire supply are attempts to exchange of as part of the planning reduce the have been supply chain planning, stock chain by the improve the information. procurement process. number of formed to reduce including the levels, invoicing, effective design requirement plan (only (Automated) invoices, the stock levels, client (e.g. using etc. of systems and planning discussed forecasts are amount of stock, order times and EDI). The processes and process internally). exchanged with etc. turnaround evaluation the use of e- internally. There these suppliers. times, and to process is also tools and other is a formal Suppliers are improve internal documented. innovative forms. internal also involved in accounting communication the process of procedures, etc. structure in optimising An action plan, which internal operational implementation multi-disciplinary purchasing. plan and teams are procedure for incorporated to evaluating agree with results are in suppliers the existence. demand determined by requirements. Strategic process 7 Improving supplier performance and quality management General description Aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Buyers' reactive and pro-active/strategic activities 7.1 Existence of Existence of a supplier performance improvement programme with or without the use of incentives (negative or positive) Ad hoc initiatives Official ’zero aimed at identifying opportunities for improvement supplier for supplier faults and facilitating improvements in the supplier's improvement improvement programme’ for performance and capacity. programme and no or limited critical programme for deliveries, incl. supplier incentives improvement. 7.2 Monitoring of Extent to which monitoring of the supplier performance improvement programme is structured/systematic. No or little Ad hoc and Pro-active Joint training in order improvement structured follow reactive follow- approach and to learn from one programme up of up of managers another improvement improvement specifically initiatives programmes only trained in supplier development in the company 7.3 Supplier Extent to which strategic suppliers have been assessed for relevant aspects (proportional) before entering into a contract. Strategic certification Suppliers who comply with the applicable definition in the purchasing policy are considered to be strategic suppliers. suppliers have been assessed for relevant aspects (proportional) before entering into contracts 7.4 Supplier The existence of a supplier performance assessment system (such as a vendor rating system) and evaluation of the measured Formal system Identification of Evidence a Some audits Audits and Process control Supplier Advanced Supplier evaluations performance performance with respect to terms of reference and contracts with suppliers. Supplier audits and process studies to evaluate for simple poor working system carried out on process studies system has been assessments quality are organised evaluation current and future skills/qualities. Regular analysis of purchasing data (contract, quantitative and qualitative analyses) supplier performance that follows up strategic carried out on all agreed with carried out at measurement performance (poor quality/late corrective suppliers strategic strategic suppliers' systems in use assessment delivery) measures by the suppliers in suppliers premises (quick (to assess the supplier (based order to fully scans) costs of 'non on complaints evaluate current quality') and supplier and future measurement). supplier competencies 7.5 Identification of Extent to which corrective action is defined on the basis of the outcomes of the evaluation process. Collaboration with suppliers Little evidence of Corrective Evidence that Particular focus Targets defined Improvement corrective action aimed at reducing costs. analysis of these measures by corrective on the most for suppliers programme results and plans supplier (on the measures have important (including terms of for corrective basis of been planned (if commodity/purch reference and follow- action (by complaints and necessary) ase families and up) set up jointly supplier) supplier suppliers assessment) 7.6 Communication Communication with supplier and other parties involved within and outside the organisation on the results of not only the Little evidence of Feedback on Communication Visit to suppliers This information Targets evaluation of the supplier's performance, analyses and corrective action to be taken by the supplier, but also the organisation these results poor performance of internal to evaluate the is documented, communicated strategy and purchasing objectives. being fed back complaints to supplier and to regularly to suppliers and to suppliers supplier on the communicate updated and other parties basis of the effectively involved complaints organisation's communicated procedure strategy and to the main purchasing parties involved objectives 7.7 Complaints The availability of a formal complaints procedure to enable complaints to be identified as efficiently as possible and to Formal Evaluation of procedure communicate on these matters with suppliers (complaints handling, claims, conflicts). complaints complaints procedure has procedure been set up 7.8 Documentation The existence of recorded information on the quality of the supplier's performance. Information is Statistical Evidence of documented evidence of the achievement of stability/compete goals and nce of these improvement in suppliers or results evidence that corrective measures have been planned Summary The process No or limited As 1, there is a As 2, As 3, a formal As 4, visits to As 5, there is As 6, a process As 7, the As 8, an As 9, supplier does not apply to programme for formal system communication complaints suppliers are evidence that control system organisation advanced quality evaluations and joint the organisation supplier for simple with suppliers procedure has arranged to the customer has been agreed takes a proactive measurement training is organised or part of the improvement. measurement of takes place on been drawn up evaluate the has carried out with strategic approach to system is in use. to enable both sides organisation. Ad hoc initiatives supplier an ad hoc basis to communicate supplier and to audits and suppliers. There supplier As part of this, to learn from one for supplier performance. in the case of internal communicate process studies is statistical development. the costs of ‘non another and to draw improvement There is little poor complaints to the with all strategic evidence of the Efforts are quality’ are up a joint with no or little evidence of performance suppliers as organisation's suppliers in stability/compete directed in measured and improvement structured follow these results (poor quality, efficiently as strategy and order to fully nce of these particular at the targets are programme up of being fed back late deliveries): possible. There purchasing assess the suppliers or most important defined and (including terms of improvement to suppliers with reactive supplier is (evidence of) a objectives in a current and evidence that commodity/purch communicated reference and follow- initiatives. For analysis and improvement. working system structured way. future corrective ase families and to the relevant up). strategic suggestions for that follows up A number of competence of measures have suppliers. The suppliers and suppliers, corrective action. corrective strategic supplier these suppliers. been planned. organisation has the most relevant aspects measures by the audits are also This information The complaints employees who important parties have been supplier (based carried out. is documented, procedure is have been involved. There checked on the on complaints regularly evaluated. specifically is an official process side for and supplier updated and trained for ’zero faults the purposes of measurement). effectively supplier programme’ for the contract communicated development. critical (including ISO, to the main Evaluation of deliveries. Clear AQAP, audits). parties involved. suppliers takes evidence of place on site (for achievement of example quick goals and scans). improvement in results. Strategic process 8 Strategic cost management General description Aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Total cost of ownership (TCO) = theory based 8.1 Cost improvement Existence of cost improvement programmes No cost Management on Promotion Supplier Task based Structural use of Structured and Systematic focus Formal, structured around the total cost involved in the entire life programme improvement the basis of total campaign for contracts contain budget for all various cost formally on integral cost and documented cycle of a product, i.e. not just the purchase price. programmes or cost of ownership employees and clauses that projects in PPI models, e.g. to organised reduction with decision making straightforward multi-disciplinary encourage improve cost promotion suppliers and process for cost purchase price teams to suppliers to structures campaign to clients improvements that management generate cost generate ideas encourage covers the entire with the focus on saving ideas. and targets for suppliers to supply chain (price) cost reduction generate cost- negotiations and (efficiency saving ideas the effect of targets) volumes 8.2 Impact of sales Impact of the sales market on costs management. For example, are the prevailing prices in the market taken into account when Targets set in Purchasing price market defining targets. line with the is in line with the developments market market as a minimum 8.3 Evaluation process Evaluation of the differences between standards and actual costs. Measurement Task setting, and analysis of measurement results and follow-up mechanisms in place 8.4 Selection Use of cost models, including requesting and assessing quotations. TCO procedure Purchasing uses procedures used for some cost models purchases 8.5 Multi-disciplinary Collaboration with various disciplines within the organisation and with suppliers and clients Multi-disciplinary Limited Client defines Joint teams set Collaboration Multi-disciplinary All suppliers and collaboration collaboration consultation with maximum price up to achieve with supplier in teams with (external) clients are within the supplier on cost for a specific cost reductions order to supplier and involved in decision organisation, but reduction product or (supplier/purchas generate cost (external) client making process on little supplier service ing organisation) saving ideas involvement cost improvements involvement. 8.6 Documentation The presence of documents and other evidence to demonstrate the existence of specific activities Little evidence of Evidence that Evidence of cost- Evidence of Decision making consultation purchasing price saving initiatives achievement of process around cost (brainstorming) is in line with the and results goals and improvements is with suppliers on market improvement in documented cost reduction results 8.7 Communication Consultations on cost structures and cost reducing measures with the parties involved The focus of Little evidence of Brainstorming communication is consultation with sessions with internal supplier current supplier and purchasing organisation with the aim of reducing costs 8.9 Use of specific The way in which a specific financing method, such as the accounts method (non depreciation) is used in the non profit sector Specific Use of cost Cost analysis financing methods methods of models that take takes into funding are not into account the account specific taken into specific characteristics of account characteristics of funding funding arrangements in arrangements the not for profit sector Summary The process No cost As 1, the total As 2, there is also As 3, supplier As 4, there is As 5, structural As 6, it is clear As 7, there is a As 8, multi- As 9, there is a does not apply improvement cost of a promotion contracts contain clear evidence of use is made of that joint structured and disciplinary formal, structured to the programmes or ownership campaign for clauses that task setting (in various cost brainstorming formally teams and documented organisation or straightforward (TCO) principle employees and encourage or budgets) for PPI models to select sessions take organised systematically decision making part of the purchase price is used (e.g. in multi-disciplinary force suppliers costs for all suppliers and place (between promotion work on integral process for cost organisation management supplier teams to to generate projects. A improve cost the current campaign to cost reduction improvements that with the focus on selection). The generate cost ideas and maximum price structures. The supplier and the encourage with the covers the entire (price) TCO procedure saving ideas targets for cost that can be paid purchase price purchasing suppliers to involvement of supply chain and in negotiations and is also formally (internal reduction (e.g. for a specific is (and can be organisation) generate cost- suppliers and which all suppliers the effect of used for programmes). efficiency service or shown to be) at with the aim of saving ideas. (external) involved and volumes. important There is little targets). Limited product is least in line with reducing costs. clients. There (external) clients are Specific products and/or reason to believe evidence of joint calculated on the the market. There is are mechanisms taken into methods of 'special' that suppliers are brainstorming basis of a price Costs are evidence of cost- for task setting, consideration. funding are not purchases/projec involved in sessions that is in line analysed using saving initiatives measurement taken into ts (e.g. capital formulating (between the with the market. cost models that and results. and follow-up. account. purchases). ideas. The focus supplier and the take into account Analysis of Clear evidence of communication procuring the specific costs, taking into of achievement is internal. organisation) characteristics of account the of goals and with the aim of funding specific improvement in reducing costs. arrangements. characteristics of results. funding arrangements in the not for profit sector. Support process 1 Strategic planning process and policy for procurement General description Aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Purchasing policy reflects strategic objectives with 9.1 Team composition Functional or multi-disciplinary team that takes the decision. Procurement Procurement respect to purchasing. The purchasing plan plan drawn up policy has been (purchasing tactics) revolves around the activities exclusively by translated into needed to realise these strategic objectives. purchasing. approved procurement plans agreed in multi-disciplinary sessions. 9.2 Documentation Documentation of procurement policy. The purchasing Evidence of self The Evidence that objectives and evaluation procurement outcomes of the relationship policy is defined discussions are with the in the general used to update organisation's policy. the procurement objectives are policy. explicitly stated in formal reports. 9.3 Understanding of Developing an understanding of the market by researching the suppliers in the market and the products/services they supply. Good Evaluation of the supplier market understanding of risk in the relationships suppliers market and forms an integral opportunities in part of the the current procurement suppliers market. policy and the procurement plans. 9.4 Supplier Differentiation between various suppliers and in approach to suppliers (e.g. evaluation of performance and improving purchasing). No system for System for System for differentiation distinguishing distinguishing differentiating between between between suppliers (using suppliers (using suppliers is in procurement procurement use (using models) or to models) and to procurement indicate the indicate the models) and for approach approach indicating the required for required for approach different different required for suppliers. suppliers. different suppliers. 9.5 Communication Communication of procurement policy to all parties involved. Purchasing Commitment Relevant parts of policy (support) for the the procurement communicated procurement policy are to internal policy is actively communicated stakeholders/little sought and to and discussed evidence of obtained from with strategic communication the lowest suppliers. of (parts of) the possible procurement authorised body policy to (the lowest level strategic that can take suppliers. these decisions) and the most important stakeholders. 9.6 Procurement plan The procurement plan incorporating the tasks, responsibilities, procurement budget and the time parameters for the plan. No procurement Procurement The Some objectives The outcomes of plan is in place, plan has been procurement in the benchmark analyses or a limited plan based on a plan is procurement are used when has been drawn detailed implemented as policy also focus drawing up the up. It only understanding of part of a formal on the internal procurement policy describes which the suppliers budgeting and efficiency of the and procurement activities need to market and the evaluation purchasing plans. The be carried out by supplier base. process. process in procurement plan is the different addition to part of line purchasing getting the most organisation policies, organisations. from supplier not just the Key policy alliances. procurement plan. principles are incorporated. 9.7 Evaluation process Process in which objectives and purchasing plans are compared against actual performance and the differences are analysed. Purchasing Evaluation of All objectives aimed evaluation is part purchasing at improving of overall objectives on the efficiency are taken evaluation of the basis of self into account in the organisation/obje evaluation. purchasing policy ctives are Improvement and plan. actively plans are compared defined. against the actual situation and if necessary are adjusted by management. 9.8 Strategy The procurement policy is in line with the general organisational strategy and planning with respect to facilities, financial policy, Purchasing The The Objectives are based technical aspects, environmental and quality policies. In addition to incorporating ethical codes, the procurement policy also objectives are procurement procurement on benchmarking. addresses issues of social responsibility (such as improving employment opportunities locally or promoting sustainable clearly in line policy is based policy is part of purchasing). The procurement policy may also state that a 'truck system' applies to specific commodity/purchase families. with the on the general the general organisation's policy. policy. objectives. Purchasing objectives are in line with the organisation's and other objectives. Purchasing is involved in drafting budgets. Summary The process No procurement The As 2, but the As 3, but the As 4, there is As 5, evidence As 6, the As 7, and the As 8, and As 9, the outcomes does not apply plan is in place, procurement purchasing procurement good that (self) procurement relevant parts of evaluation of the of benchmark to the or a limited plan plan has been objectives are plan is communication evaluations are policy has been the procurement risk in the analyses are used organisation or has been drawn based on a clearly in line implemented as of procurement used to translated into policy are suppliers market when drawing up the part of the up, in which detailed with the part of a formal policy matters to formulate approved communicated forms an integral procurement policy organisation. case, it has been understanding of organisation's budgeting and stakeholders procurement procurement to and discussed part of the and procurement drawn up the suppliers objectives. The evaluation internally. Little objectives and to plans by multi- with strategic procurement plans. All objectives exclusively by market and the purchasing process. The evidence of set priorities for disciplinary suppliers. There policy and the aimed at improving purchasing. The supplier base. objectives and procurement communication undertaking sessions. is evidence that procurement efficiency are taken procurement There is a good the relationship policy is based of matters improvement Commitment the outcomes of plans. into account in this plan only understanding of with the on the general relating to the initiatives. Some (support) for the the discussions process. These describes which relationships organisation's policy. procurement objectives in the procurement are used to objectives relate activities need to and objectives are Purchasing policy to procurement policy is actively update the partly to purchasing be carried out by opportunities in explicitly stated objectives are in strategic policy also focus sought and procurement and process the different the current in formal reports. line with the suppliers. on the internal obtained from policy (in the optimisation. The purchasing suppliers Models such as organisation's efficiency of the the lowest future). procurement plan is organisations. market. There is BSC, INK or and other purchasing possible part of line Key policy a system for EFQM are used objectives. process in authorised body organisation policies, principles are distinguishing for this purpose. Objectives are addition to (the lowest level not just purchasing. used. There is between actively getting the most that can take no system for suppliers (using compared from supplier these decisions) distinguishing procurement against the alliances. A and the most between models) and to actual situation system for important suppliers (using indicate the and if necessary differentiating stakeholders. procurement approach are adjusted by between The models) or to required for management. suppliers is in procurement indicate the different Purchasing is use (using policy forms part approach suppliers. involved in procurement of and is required for drafting budgets. models) and for recorded in the different indicating the general policy. suppliers. approach required for different suppliers. Support process 2 Structure of the purchasing organisation General description Aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Structure of the purchasing organisation, i.e. the 10. Multi-disciplinary Partnerships with the various disciplines within the organisation and with suppliers and clients. No or little Purchasing Clarity about Some multi- Different multi- All necessary Multi-disciplinary Multi-disciplinary allocation of tasks, responsibilities and authorities 1 collaboration coordination and expertise is roles and the disciplinary disciplinary multi-disciplinary teams also teams work in throughout the organisation. partnership involved in all responsibilities collaboration teams have teams have influence partnership with between roles purchasing and of team members been put in been put in developments the client and within the expenditure place at the level place. A steering with contracted the supplier to organisation, flows and is also of the part of the group provides suppliers achieve between informed at the organisation guidance to the improvements/in different appropriate time teams (group- novations organisations in order to wide) and between the contribute to the various supplier purchasing selection and organisations of contracting parts of process. organisations. 10. Evaluation Evaluation of the level and performance of purchasing within the organisation. Steering group 2 evaluates the performance and the level of the purchasing role within the organisation and takes decisions about suitable participants for these teams 10. Responsibility Extent of responsibility: from implementation to a more strategic/responsible role, with a differentiation between tactical and The purchasing Purchasing Purchasing has Supplier strategic Role separation 3 operational activities. Strategic activities include defining policy and the main aspects of supplier management. Tactical activities role is primarily expertise is both tactical and evaluation, purchasing is between strategic, include contracting, product design, market research. Operational activities include the ordering and receipt of products. executive and involved in all strategic role selection and implemented as tactical and administrative tactical and integration in a separate set of operational operational product process activities (in purchasing purchasing innovation takes addition to activities in good place in local tactical and time. (organisation operational part) teams. activities) 10. Documentation The availability of documents and other evidence to demonstrate the existence of specific activities (including the reasoning Little evidence of Formal evidence 4 behind a decision). the existence of of strategic strategic purchasing purchasing activities 10. Management level Position of purchasing management within the organisation and level of the organisation at which the responsibility for Purchasing is Some evidence Purchasing is 5 purchases is held. represented at of coordination represented on strategic level for of the policy-defining which a member purchasing role committees at of the across parts of group level management the organisation team (MT) holds ultimate responsibility. 10. Optimisation of Optimisation of the purchasing organisation by distributing purchasing tasks, taking into account the purchasing portfolio and Purchasing Purchasing Distribution of Role separation 6 purchasing characteristics of the organisation. tasks are tasks are purchasing between strategic, distributed to a distributed in a tasks fully tactical and (very) limited reasonably coordinated operational extent, coordinated way purchasing, and distribution is between the various uncoordinated. disciplines 10. Purchasing Extent to which the purchasing organisation structure is in line with the general organisation strategy, objectives and structure, Not in line Some of the Purchasing 7 organisation and the extent to which the purchasing structure supports strategic, tactical and operational purchasing. A specific organisation purchasing organisation is fully configuration has been selected on the strength of structural variables, e.g. centralised, decentralised or coordinated. organisation is in in line with the line with the organisation's policy, policy, objectives and objectives and structure structure of the organisation 10. Communication Extent to which the purchasing organisation structure is communicated to stakeholders. The distribution The distribution 9 of purchasing of purchasing tasks is not tasks is communicated communicated to interested to stakeholders. parties 10. Policy relating to Formalisation of the policy with respect to partnerships between parts of the organisation with different basic principles. No policy Some thought Formal policy Evaluation of the Identification of 8 partnerships has been given covering the current policy on possible areas to possible approach to partnerships for improvement partnerships partnerships and further with other (parts refining of the of) organisations partnership with different policy basic principles. Summary The process Little or no Purchasing As 2, purchasing As 3, with some As 4, a number As 5, strategic As 6, all the As 7, multi- As 8, multi- The current does not apply coordination expertise is fulfils both a evidence of of multi- purchasing is necessary multi- disciplinary disciplinary purchasing to the and/or involved in all tactical and a coordination of disciplinary implemented as disciplinary teams also teams work in organisation is in line organisation or partnership purchasing and strategic role. the purchasing teams have a separate set of teams have influence partnership with with the policy, part of the between the expenditure There is clarity role across parts been put in activities in been put in developments the client and objectives and organisation. purchasing roles flows and is also about roles and of the place at the level addition to place. A steering with contracted the supplier to structure of the within the informed at the the organisation. of the part of the tactical and group provides suppliers. achieve organisation. The organisation and appropriate time responsibilities Purchasing organisation to operational guidance to the Identification of improvements/in purchasing between other in order to of team tasks are support supplier purchasing teams group- possible areas novations. organisation roles. The contribute to the members. distributed in a evaluation, activities. wide, for improvement maximises strategic, purchasing role supplier Purchasing is reasonably selection and Typical strategic coordinates and further tactical and is primarily selection and represented at coordinated way integration in purchasing decision making refining of the operational executive and contracting strategic level for and are processes for activities are between the partnership purchasing (role administrative. process. Tactical which a member communicated product and carried out teams, evaluates policy. separation takes Purchasing purchasing has of the to stakeholders. process formally and the position and place within this). tasks are been management Some multi- development. within a the level of the Role separation also distributed to a implemented as team (MT) holds disciplinary The current structure, for purchasing role takes place between limited extent a separate group ultimate teams to support policy on example within the the different only to achieve of activities in responsibility. purchasing partnerships is carrying out organisation and disciplines. leverage, addition to Some of the processes. evaluated. fundamental takes decisions distribution is operational purchasing market research about suitable uncoordinated purchasing. organisation is in or technical participants in and is not There is little line with the research and these teams. communicated. evidence of policy, developing a Purchasing is There is no strategic objectives and strategy for each represented on policy for purchasing structure of the commodity/purch policy-defining partnership activities. Some organisation. ase family. The committees at arrangements. thought has Formal policy distribution of group level. been given to covering the purchasing possible approach to tasks to achieve partnerships partnerships leverage is fully with other with other (parts coordinated. organisations (or of) organisations parts of with different organisations) basic principles. and how this could work out in practice. Support process 3 Globalisation General description Aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Support process 4 Performance indicators for purchasing General description Aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Information that provides an understanding of 12.1 Indicators Use of performance indicators to monitor supplier and purchasing performance (including financial and quality indicators). No supplier Formal criteria Wide-ranging Performance Qualitative and Purchasing supplier performance performance and a system in integrated set of indicators in quantitative performance indicators or place to identify performance place for (TCO) indicators form basic set of the suppliers indicators in measuring the performance part of an indicators (to whose place to efficiency of indicators in integrated set of evaluate the performance measure the purchasing place for the organisational performance of should be performance of processes (for entire lifecycle of performance suppliers: e.g. measured. suppliers in the optimising the purchased indicators quality, price operational and purchasing product. changes, improvement processes) timeliness of process deliveries and availability of support) and purchasing performance 12.2 Extent to which purchasing performance indicators are in line with purchasing policy and the organisation's objectives. indicators Purchasing Integration of performance performance indicators and indicators are in objectives accordance with the procurement policy and the organisation's objectives 12.3 Evaluation Measuring actual quality and quantity against target and analysis of the differences on the basis of performance indicators, Supplier Frequent Self-evaluations Measurement of Purchasing Measured values are including indicators such as price, quality, delivery service. TCO should also be into account. performance evaluation of are organised on aspects such as performance used to identify, indicators are suppliers' a regular basis price, quality, indicators are isolate and analyse measured and performance. to measure the delivery service regularly (at the most important compared maturity of and the costs of least once a product cost drivers against targets purchasing non- quarter) and in the entire supply performance by formally chain together with the supplier. The evaluated at suppliers and performance management customers. measures are level in formal used for future management purchasing reports (using plans (sourcing), tools such as new Business development Balanced plans and Scorecard, continuous EFQM or INK). improvement activities, in accordance with 12.4 Documentation Availability of documents and other evidence to demonstrate the existence of specific activities. Written evidence Performance that indicators indicators to are in measure the accordance with efficiency of purchasing and purchasing organisational processes have objectives been defined and explicitly recorded. 12.5 Communication Providing feedback on performance to stakeholders, including suppliers. Feedback on Performance Formal actual indicators are evaluation at performance communicated management relative to to and level via formal agreed understood by management performance is the whole reports. given to direct organisation. stakeholders. 12.6 Improvement plan Extent to which improvement plans are developed on the basis of measured performance values. Measured Improvement values are used plans based on to prepare evaluations general plans for resulting in improvement continual together with improvements in suppliers results. 12.7 Classification Classification system for purchased products. A system for system grouping commodity/purch ase families is in use. Summary The process No supplier As 1, and there As 2, there are As 3, the As 4, and there As 5, and there As 6, and self- As 7, there are As 8, and the Measured values are does not apply performance is written formal criteria measured is a wide- are indicators in evaluations are qualitative and purchasing used to identify, to the indicators or evidence that and a system in values are used ranging place for organised on a quantitative performance isolate and analyse organisation or basic set of the purchasing place to identify to prepare integrated set of measuring the regular basis to (TCO) indicators form the most important part of the indicators (to performance the suppliers general plans for performance efficiency of measure the performance part of an product cost drivers organisation. evaluate the indicators are in whose improvement indicators in purchasing maturity of indicators in integrated set of in the entire supply performance of accordance with performance together with place to processes (for purchasing. place for the organisational chain together with suppliers: e.g. the procurement should be suppliers. measure the optimising Benchmarking is entire lifecycle of performance suppliers and quality, price policy and the measured. performance of purchasing also used. the purchased indicators. The customers. changes, organisation's Feedback on suppliers in the processes). The product. These indicators are timeliness of objectives. actual operational and performance indicators regularly (at deliveries and performance improvement indicators are include price, least once a availability of relative to process. communicated quality, delivery quarter) and support) and agreed to and service and the formally purchasing performance is understood by costs of non- evaluated at performance given to direct the whole performance by management indicators. The stakeholders organisation. the supplier. The level in formal supplier and regularly performance management performance evaluated. measures are reports (using indicators are used for future tools such as measured and purchasing Business compared plans (sourcing), Balanced against targets. new Scorecard, A system for development EFQM or INK). grouping plans and commodity/purch continuous ase families is in improvement use. activities, in accordance with the regulations. The results show constant improvement. Support process 5 Information technology integration General description Aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Development and use of information technology 13.1 Purchasing Advanced purchasing information system in use (contract/creditor database/liability accounts/purchasing management reports, No purchasing There is a stand The purchasing Information Information Information If applicable, Internet (IT) for purchasing. information and use of e-procurement technology such as EDI). Purchasing system must be linked to financial system. information alone information system supports systems that system supports information functionalities system system is in use. purchasing system forms the involvement facilitate strategic systems are extensively The purchasing information part of the of suppliers in purchasing decision making. facilitate supplier used (e- department does system solely integral the order control. Use of involvement in commerce, not have a used for organisation's fulfilment data warehouses product supplier network operational information process. Links that support development selection, market connection. purchasing system. that transcend volume- (e.g. CAD/CAM) research, e- processes. the organisation bundling, auctions and e- such as extranet standardisation invoicing) and EDI are in and use. centralisation of commodity/purch ase family management and decentralised ordering 13.2 Optimisation of Extent to which information systems are used to optimise purchasing processes. For example, information systems can support Information Information processes the strategic purchasing role by facilitating volume bundling, standardisation and centralisation of commodity/purchase family systems support system supports management and decentralisation of ordering. the strategic and analysis purchasing (role) processes (e.g. cost analysis models) 13.3 Purchasing Extent to which information systems are used to measure performance indicators. Purchasing Performance performance performance indicators are indicators indicators are used to draw automatically comparisons measured and with other presented by the organisations information and to learn from system these 13.4 Documentation Availability of documents and other evidence to demonstrate the existence of specific activities. These documents can be used Evidence that Evidence of the Evidence that Evidence of for knowledge management. purchasing fact that data internet participation in performance warehouses are functionalities information indicators are used are extensively system/information automatically used. technology measured and management presented by the information system 13.5 Position within Collaboration with IS/IT management to identify IT system requirements. Evidence of formal the organisation and proactive collaboration with information system (IS)/information technology (IT) management to identify purchasing requirements and to implement strategies 13.6 IS/IT purchasing Availability of IS/IT policy for purchasing aligned to the general IS/IT policy. IS/IT policy is policy aligned to IS/IT policy for the entire organisation Summary The process No purchasing There is a stand The purchasing As 3, there is As 4, and the As 5, there are As 6, information As 7, if As 8, there is As 9, there is does not apply information alone information evidence that information information systems support applicable, evidence that evidence of formal to the system is in use. purchasing system forms purchasing system supports systems that strategic information internet and proactive organisation or The purchasing information part of the performance the involvement facilitate decision making. systems functionalities collaboration with part of the department does system solely integral indicators are of suppliers in purchasing facilitate supplier are extensively information system organisation. not have a used for organisation's automatically the order control. There is involvement in used (e- (IS)/information network operational information measured and fulfilment evidence of the product commerce, technology (IT) connection. purchasing system. presented by the process. Links use of data development supplier management to processes. information that transcend warehouses for (e.g. CAD/CAM). selection, market identify purchasing system. the organisation example to Performance research, e- requirements and to such as extranet support the indicators are auctions and e- implement and EDI are in strategic used to draw invoicing). strategies, an IS/IT use. purchasing comparisons policy is in place that (function) using with other is aligned to the IS/IT volume organisations policy of the whole bundling, and to learn from organisation. standardisation these. and centralisation of commodity/purch ase family management and decentralised ordering. Support process 6 Human resource management (HRM) General description Aspects Notes 0 (N/A) 1 2 3 4 5 6 7 8 9 10 Development of knowledge and skills 14.1 HRM support Availability of human resource management (HRM) support for the purchasing process (= purchasing role, in this case not the little or no HRM HRM is involved Specific HRM Information (management of competences such as buyer). support for the in individual policy for systems for knowledge, attitude and skills) purchasing evaluation of purchasing, knowledge process. knowledge and including management are skills objectives, used across the succession individual parts planning, of the training, organisation recruitment and selection 14.2 Purchasing profiles Availability of purchasing profiles including job descriptions and competences. Profiles are used for recruitment, selection and No or limited Job profiles are A career policy development. availability of up used. is actively to date profiles Recruitment, pursued that for the selection and transcends the purchasing role training based boundaries of (incl. job on analysis of roles descriptions and required skills competences) for recruitment and selection purposes 14.3 Training Extent to which training is used to develop buyers' knowledge and skills. No development No personal Training based Individual of competences competence on analysis of training and development required skills career planning 14.4 Multi-disciplinary Individual objectives are formulated that go beyond the limits of the role and the organisation. Career policy Multi-disciplinary approach that transcends appraisal cycles the boundaries of roles 14.5 Evaluation Evaluation and analysis of the differences between actual individual and team performance and individual targets. Each buyer has Appraisal and Continuous and Understanding Purchasing is Personal Organisation The part of the Individuals are an individual remuneration formal process of the formally development actively pursues organisation evaluated in multi- appraisal and system is related of appraisal of competences included in the plans are used a career policy actively pursues disciplinary appraisal individual to purchasing individual skills and specialised annual (as a based on the that transcends a career policy cycles take place. targets are set performance. (required versus knowledge rule) purchasing the boundaries that transcends Team targets are set There is an available). available within management profile, disparity of positions the boundaries and regularly explicit Assessment of the development analysis and (within the part of the evaluated on the relationship competence organisation's review of all the staff appraisals of the organisation basis of a formal between the workforce that different organisation) process achievement of could be departments purchasing employed in targets and the purchasing outcomes of staff teams appraisals. Appraisal and remuneration plans are partly related to the performance of the multi- disciplinary team 14.6 Remuneration The method by which the buyer's remuneration is determined. Buyers' The remuneration is remuneration set individually system is linked to purchasing performance 14.7 Communication Communication of personal development plan by purchasing manager to the individual. The personal development plan is evaluated at regular intervals by purchasing manager and individual. 14.8 Teams Extent of team based performance. Appraisal and Team targets are set remuneration and regularly system linked to evaluated on the purchasing basis of a formal performance process. 14.9 Documentation Availability of documents and other evidence to demonstrate the existence of specific activities. No or limited Little evidence of Evidence that Evidence that Evidence that evidence of personal remuneration is job profiles are personal HRM support competence linked to used development development purchasing plan is regularly performance evaluated 14.10 Employee integrity Extent to which employee integrity is supervised. No specific Employees are Employee Employees The part of the supervision informed of the integrity is receive feedback organisation integrity evaluated on the extent to takes effective principles they which they are measures to must uphold upholding the ensure that integrity employees principles uphold integrity principles Summary The process There is little or Up to date job As 2, the As 3, there is a As 4, there is a As 5, purchasing As 6, personal As 7, the part of As 8, the part of As 9, there is does not apply no HRM support profiles for appraisal and continuous and specific HRM is formally development the organisation the organisation evidence that multi- to the for the procurement remuneration formal process policy for included in the plans are used actively pursues actively pursues disciplinary appraisal organisation or procurement (incl. job system is related of appraisal of purchasing, annual (as a (including a career policy a career policy cycles take place. part of the process. There descriptions and to purchasing individual skills including rule) individual that transcends that transcends Team targets are set organisation. is no focus on competences) performance. (required versus objectives, management training and the boundaries the boundaries and regularly developing are available. There is an available) and succession development career plans) of roles (within of the evaluated on the competences. Profiles are used explicit recruitment planning, review of all the based on the the part of the organisation. basis of a formal for recruitment relationship and/or training training, different purchasing organisation). Each part of the process. and selection. between the on this basis. recruitment and departments. profile, disparity organisation There is achievement of There is selection. There analysis and implements evidence that purchasing evidence that job is an staff appraisals. effective personal targets and the profiles are used understanding of The purchasing measures to assessment outcomes of staff and HRM is the manager and the ensure that takes place and appraisals (for involved in this competences individual employees individual anyone involved process. and specialised evaluate the uphold integrity targets are set in the Evaluation of the knowledge personal principles. for each purchasing integrity of available within development Information purchaser. Little process). employees takes the plan regularly. systems for evidence of Appraisal and place. organisation's Employees knowledge personal remuneration workforce that receive feedback management are competence plans are partly could be on the extent to used across the development. related to the employed in which they are individual parts There is no performance of purchasing upholding the of the specific the multi- teams. integrity organisation. supervision of disciplinary principles. employees' team. integrity. Employees are informed of the integrity principles they must uphold.
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