What is a purchasing strategy?

In order to carry out the tasks assigned to the purchasing department (buying products, services or supplies under the best market conditions…), a purchasing strategy must be established. Without a strategy, you cannot expect a high-performing supplier relationship and you will probably be subjected to the events of supplier relationships.

The purchasing strategy

The purchasing strategy is guided by the search for the function’s best contribution to the overall competitiveness of the company. In addition, it is in perfect alignment with the general strategy and covers the following points, which constitute so many complementary areas of action:
• establishes and validates the objectives specific to purchasing;
• sizes the resources and validates their release;
• details how to achieve the objectives;
enables the teams and internal customers to be engaged (visibility, peace of mind, collaboration)

Establishing the objectives and the action plan specific to purchasing

This involves synthesising the company’s objectives and translating them operationally across all the managed purchasing categories.

Although easy to say, doing it is a long and relatively complex exercise. Indeed, the objectives will have to be translated according to the available resources but also to the many constraints (market developments, operational emergencies, the level of performance required and available…). In practice, this will involve following the steps below, some of which may already have been established:

• Collect historical spend by supplier (and, if possible, by item/service)
• Establish a consistent segmentation for all its spend categories. Special Trading: Analyse the Sales strategy (needs / constraints / trend)
• Analyse the supplier market by type using Porter’s diagram
• Establish a Kraljic matrix by segment (family and/or type level)
• Establish a SWOT matrix for each type
• Generate and assess improvement initiatives according to the given objectives
• Establish an Effort / Benefits matrix for each type
• Establish a detailed action plan with schedule / indicators / reporting

The supplier policy

Our company’s policy regarding supplier relationships aims to build their loyalty. To do this, the long-term relationship created by this policy must be managed using a performance measurement system for the existing or future supplier panel.

The communication policy

It operates at two levels:
• internally, the purchasing department is a privileged place of exchange in which the various players of the company can intervene
• externally, the purchasing department implements all the means enabling the company to project a strong image in terms of ethics and skills in the field of purchasing.

The human resources policy

In today’s economy, the act of purchasing has become complex and so the profiles of the players in the function are constantly evolving. The level required to practise this profession is increasingly high; there is a bit of a search for the rare gem, capable of being at once analytical, communicative, showing leadership, a negotiator, comfortable in technical / financial / legal / quality environments…

There is therefore necessarily a development plan to build with each member of a purchasing team in order to meet all these challenges.

The supplier quality policy

• the organisation must ensure that the purchased product complies with the specified purchasing requirements,
• the type and extent of the control applied to the supplier and to the purchased product must depend on the impact of the purchased product on the subsequent realisation of the product or on the final product,
• the organisation must assess and select suppliers according to their ability to supply a product that complies with the organisation’s requirements,
• the selection, assessment and reassessment criteria must be established.

Purchasing ethics

It is broken down along three axes:

1. establishing rules and procedures

Corruption is a risk in the environment of the purchasing function, hence the need to put in place rules, charters and procedures, in order to bring more transparency and to maintain the trust of suppliers and customers.

A code of ethics must be formalised with the following founding principles:
• assessment and selection of suppliers,
• involvement of suppliers upstream,
• communication and exchange of information with suppliers,
• intellectual and industrial property,
• frequency of consulting suppliers,
• contracting principles
• main contractual clauses,
• principles for challenging suppliers,
• supply policy,
• general purchasing conditions.

2 . Relationship with suppliers

Fairness must be ensured between suppliers throughout the purchasing process:
• sending similar files,
• requesting similar information,
• equal access to information,
• identical conduct of negotiations,
• a summary of contacts, offers and negotiations for each case.

3. The ethics charter

Purchasing ethics is the set of rules of conduct that one imposes on oneself or imposes on one’s suppliers. This document, distributed to all the players in the supplier relationship, describes not only the purchasing procedures, but also sets the ethical rules to which they must submit.

It is as much about transparency as it is about integrity or responsibility. The main principle of the code of ethics is to recall some rules of good conduct. The purchasing department’s wish is to enforce these preventive measures.

Some fundamental rules of the charter to respect:
• avoid contempt and cynicism towards suppliers and subcontractors,
• customer/supplier relationships are established over the long term after numerous mutual and sustained efforts,
• these relationships are constantly challenged by economic and technical vigilance,
• work over the long term and avoid gratifying short-term moves that jeopardise the future of the relationships,
• keeping one’s word and showing honesty are attitudes that sustain relationships,
• do not build the prosperity of your company on the ruin of others.