Institute of Commercial Management | Qualification Subject

Purchasing Strategies

Main Topics of Study

Purchasing

  • Purchasing defined
  • Scope of purchasing
  • Creating profit in a business
  • Processes examined
  • Place of purchasing
  • Financial impact of functions
  • Purchasing as a strategic process
  • Purchasing strategy and strategic purchasing

Building a Purchasing Strategy

  • Contribution and influence
  • Purchasing and audit framework
  • Organisation
  • Relationships
  • Systems
  • Staffing and training
  • Enabling foundation

Strategic Purchasing – Understanding and Influencing the Supply Market

  • Current problems
  • Upstream and downstream management
  • Supply planning
  • Special requirements identification
  • Contract strategy
  • Supplier selection
  • Contract finalisation

Understanding the Basics of Purchasing

  • Anyone can buy
  • Price and cost
  • Price and volume
  • Buyer power increases with size of organisation
  • Price lists
  • Competitive bidding
  • Negotiation and service/quality
  • Sealed bidding and security
  • Multiple sourcing
  • Price formulae
  • Buyer power and monopoly
  • Payment

Supply Positioning

  • Pareto analysis
  • Setting up a supply positioning analysis
  • Supply-market segmentation
  • Purchasing goals
  • Purchasing action scenarios
  • Other applications
  • Conglomerates’ purchasing

Supplier Preferences

  • Key account management
  • Customer segmentation by suppliers
  • Matching supply positioning with customer segmentation

Vulnerability Management

  • Identifying vulnerabilities
  • Assessing the risk
  • Managing the risk
  • Vulnerability analysis
  • Cost reduction
  • Other issues

Influencing the Supply Market

  • Procurement marketing
  • Reverse marketing
  • Affirmative vendor improvement

Buyer-Supplier Interface

  • Specific requirements identification
  • Getting early involvement
  • Supplier-buyer conditioning
  • Conditioning the buyer
  • Keeping the seller selling
  • Conditioning the seller

Options for Supplier Relationships

  • Make v buy
  • Market analysis
  • Supplier relationships
  • Changes in supply market
  • Buyers response to changing market
  • Dependency dilemma
  • Supply market orientated role for purchasing
  • Assessing competitive advantage

Partnership Sourcing

  • Definition
  • Why develop partnership sourcing?
  • Declared partnership goals
  • Key issues

Monopolies and Cartels

  • Monopolies
  • Determining the extent of the supply monopoly
  • Strategies to redress the balance
  • Cartels

Organising for Impact

  • Parkin wheel
  • External environment
  • Role
  • Relationships
  • Systems and structures
  • Resources

Measurement, Audit and Benchmarking

  • Why measure?
  • Operational or strategic
  • Use of indicators
  • Overall indicators
  • Indicators related to supply positioning
  • Limitations of indicators
  • Management by objectives
  • Measurement summary
  • Benchmarking

Example Candidate Response Booklet

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Recommended Reading

Main Text:

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Profitable Purchasing Strategies – Steele & Court (McGraw Hill)

Indicative Text:

Alternative Text and Further Reading: