Services are a big part of your company’s indirect spend, those items and activities that are not directly linked with making products for your customers. This video discusses transportation as a focal point and offers five performance measures to consider when purchasing transportation services.
- When most people think of a professional buyer, … they picture someone who purchases … all the things needed for the company to make a product. … You know, raw materials and components … and machines in the factory. … But this direct spend is only a part of the purchasing task … although a very big part for most companies. … There's also the category of indirect spend, … and it's becoming more and more important today … as companies continue to control their expenses. … Indirect spend is all goods and services … that are not directly a part … of providing your product to the customer. … There are several major types of indirect spend. … Transportation and logistics services … can be a very large part of a company's purchases, … especially if they buy globally. … Utilities are another example, … like electricity and water. … Travel is a very common company expense. … And buying advertising, marketing, or consulting services … are also great examples. … Let's take a closer look … at one of the most important indirect purchases …
- Explain the purchasing process.
- Define purchase order.
- Describe the intent of a purchasing policy.
- Distinguish types of purchasing structures.
- List the steps of selecting a supplier.
- Identify enablers for success in worldwide sourcing.
- Perform price and cost analysis.
- Measure supply management performance.