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Monday
27Oct

Procurement Industry Adage

It’s a procurement industry adage: for every pound brought in by sales, between 10 and 40 pence goes straight to the bottom line; for every pound saved, the entire pound goes to the bottom line.

Successful people say inspiration isn’t all luck. Equally important is having an open mind, especially in tumultuous times.

Thanks to a rising dollar, might global sourcing strategies once again dominate the efforts of US companies trying to save money on direct material purchases in the coming year?

Alan Greenspan told Congress today the economic meltdown is a “once in a century credit tsunami” that policymakers didn’t anticipate. hmmm.

Half of U.S. employees have been bullied at work. Could suppliers say the same thing?

During a time of economic crisis, it would be nice to have a gadget that procurement could use to sniff out money. Such a device may literally be coming in a few years, thanks to a breakthrough announced a few days ago by researchers at the Massachusetts Institute of Technology. They are developing an artificial nose.

So what, then, is a perfect order? A perfect order index is "a compilation score which measures the result of each of the four major components of a perfect order":

    • delivered on-time (the percentage of orders that arrive at their final destination at the agreed upon time between the customer and the shipper);
    • shipped complete (the percentage of orders shipped with all lines and units);
    • shipped damage free (the percentage of customer orders shipped in good and usable condition);
    • correct documentation (the percentage of total orders for which the customer received an accurate invoice and other required documents).

The perfect order index is calculated by multiplying each component to one another. If a company has a 95% score for each of the four components, for example, then the perfect order index would be 81.4%.


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