Procurement Value Creation as function of Risks, Commercials and Opportunities

1. Missing Bricks for Value Creation
3 DIMENSIONAL BUSINESS ASSESSMENT
Main Layer (X, Y, Z) Value Creation as function of Risks, Commercial and Opportunities
Main activity axes defined as Risk, commercial & Opportunity Assessments, Need to be continuously
performed at all phases of a future procurement cycle to secure value creation in all deliveries.
Second layer relationship (x, y, z)
Value creation as function of
Efficiency, Sourcing & Innovation
Between ‘’Value Creation’’ as the core delivery
of procurement organization through:
X,Y,Z (Efficiency, Vendor Innovation and strategic Sourcing)
1- Efficiency & Productivity Analysis
X- Value Chain Analysis
Y- Vendor Performance Analysis
Z- Vendor Business Review
2- Sourcing Analysis
X- Contract Analysis
Y- Service Level Analysis
Z- Cost Optimization Analysis
3- Innovation Analysis
X- Business Need Identification
Y- Vendor Capability Analysis
Z- Markets, Trends & vendor data mining
Third layer of measurable results (x,y,z)
It is the measurable results of Efficiency, Innovations and
sourcing strategy:
1- Efficiency & Productivity Improvement
X- Vendor performance & deliverables
Y- (BOM) Bill of material & Operations analysis through
(SOM) Service Operations Modeling
Z- Value Chain Optimization
2- Sourcing strategy development:
X- TCO reduction, Cash flow optimization
Y- Enhance contract compliance
Z- Improve service level
3- Vendor Innovation development:
X- Joint optimization initiative (existing state to generate
innovation based on company identified needs)
Y- Joint development initiative (Align vendor potentials
and company identified needs for innovation
development )
Z- Joint Market initiative (identified market opportunity
for mutual growth)
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