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Purchasing Performance Measurement At Ibm Essay

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PURCHASING PERFORMANCE MEASUREMENT AT IBM
6.1 Purchasing Performance Measurement
Purchasing is defined as the management of a company’s external resources in such a way that the supply of all goods, services, capabilities and knowledge which are necessary for running, maintaining and managing the company’s primary and support activities are secured under the most favourable conditions. (Van Weele, 2014).
Purchasing is vital to primary and support activities in business, where direct purchasing refers to spend targeted at acquiring materials and services to manufacture end products and support purchasing to cover the running of the back office (Van Weele, 2014). Purchasing is an integral part of day to day operations. Based on this observation, spending on materials and services represents a major chunk of a firm’s overall cost. It becomes imperative to view purchasing as a key strategy for improving bottom line and increasing profits.
Global competition, leading to pressure to reduce cost and increase outsourcing contributes to the growing strategic importance of purchasing (Carter, 2005).
Purchasing performance will be judged based on the responsibilities and expectation of the purchasing department at each unique organization. In other words there is no one size fits all criteria or set of indicators to measure purchasing performance across board.
The way an organization views purchasing will determine the criteria it uses to measure its performance. Using the Van Weele
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