Effective Procurement (Part 2)

 

When making decisions whether to acquire goods and services from suppliers or use internal resources to achieve the same results, there is specific comparative analysis that needs to be conducted. This course will help ensure that your team is skilled in conducting this type of analysis and can apply financial leveraging strategies, as required.

 

Performing make-or-buy analysis

-          Establishing exact needs, including volume or frequency of service

-          Determining if buying or outsourcing is viable (tools to comprehensively consider suppliers’ skill set, equipment, experience)

-          Determining if making internally is viable (methods to assess in-house skill and experience level)

-          Common practices in assessing quality considerations

 

Performing lease-or-buy analysis

-          Assessing various types of leases (finance lease, full payout lease, leveraged lease, net lease, operating lease)

-          Review of advantages of leasing such as cash flow management, tax advantages (comparing to financial risks)

-          Aligning the procurement decision with the organization’s strategic priorities

 

Readings:

 

Strategic Sourcing: To Make or Not To Make by Ravi Venkatesan

“Today manufacturing focus means learning how not to make things—how not to make the parts that divert a company from cultivating its skills, parts its suppliers could make more efficiently. This idea has often been advanced, but few managers have found a way to bring its logic down to earth…….”  https://hbr.org/1992/11/strategic-sourcing-to-make-or-not-to-make

 

Training outlines like this one are prepared by AllaVolodina. They cover a variety of topics including finance, accounting, procurement, management accounting, strategy. You can also read other articles suggested by AllaVolodina (York University) here: www.allavolodina.com