What is the most crucial part of purchasing in today’s dynamic market scenario?
In modern organisations, the purchase department represents a major interface between the hotel and the vendors/service providers. The purchase department has to work very closely with all the internal departments and support them in a most efficient and effective manner. The purchase managers have to actively involve themselves in the decision making process and come up with solutions that are best suited for the organisation. Purchasing as a function continues to offer tremendous opportunities for substantial cost reduction, whichever way we look at it. Purchase stands out as the single most important area which deserves a focused effort by the management in order to reduce the costs and improve profitability of an organizations.
What vendor compliance systems did you initiate for cost savings?
Any purchase department has to exercise effective compliance systems as a part of their day-to-day job and before finalizing any contracts or orders. We can define cost analysis as analysis of all the factors that are part of the prices and the attempt to ensure that the final prices are a reasonable one in terms of the utility of the materials. Few tips for successful compliance systems are: reward good suppliers who help you meet the goals of your organisations and inform unsatisfactory suppliers promptly when deficiencies are identified. Suggest remedies and offer assistance. Remove consistent unsatisfactory suppliers from the approved supplier list and eliminate them from further contracts. Limit the size of the supplier base but keep it fresh and dynamic by developing new sources of supply. Proactively cultivate and manage supplier relations to produce continuous improvements in quality, service and price.
How do you identify high risk vendors? What are the various measure and procedures introduced to deal with this?
One of the most crucial components of the procurement process is the selection of the right supplier. A good supplier is one who is at all times honest and fair while dealing with the customers, supplies within the promised deadline, whose financial position is sound, whose prices are reasonable both to the buyer and himself, whose management policies are progressive, who is aware to the need for continued improvement in both his products and his manufacturing process. A good supplier is an invaluable resource to the organization requiring its products or service as they make a direct contribution to a firm’s success.
How do you train your team to follow procedures for smooth coordination in supply chain management?
The following objectives can be measured to train and ensure the growth of the purchase team: maximization of cost reduction without compromising on quality of materials, make or buy analysis and implementation of the same, timely payment of the suppliers, maximisation of credit availability, minimisation of pilferages, breakages and spoilages of material, minimisation of operating cost and adherence to operation budgets, minimisation of processing capacity of purchase department, optimisation of quantity by better supplier relationship, timely deliveries and minimisation of internal lead time, standardisation and variety reduction, good quality of materials and minimisation of rejections and good vendor performance.
How has the domain of purchase changed over the years? Do the purchase managers have to develop certain skills today?
With ever-increasing expectations of the customers for excellence, growing competition and severe pressures on pricing, the demands on the purchase managers are undergoing a sea change. From being perceived as a merely buyer of inputs and services, the management now expects purchase managers to a play significant role in enhancing the profitability of the organization. A good and efficient purchase manager has to develop certain skills such as commercial competencies, vendor knowledge base, negotiations skills, costing/financial skills, rate analysis skills, payment terms, vendor relationship management skills, inventory management/material control skills, supply coordination and logistics management, insurance skills, imports/ EPCG, SEIS related purchase knowledge, technical competencies and leadership skills.
